Reddit WallStreetBets vs Wall Street hedge funds

[BigHornRam]

What are the true believers saying about the hedge funds on this?

Hedge funds bet on oil's 'big comeback' after pandemic hobbles producers

Hedge funds are turning bullish on oil once again, betting the pandemic and investors' environmental focus has severely damaged companies' ability to ramp up production. Such limitations on supply would push prices to multi-year highs and keep them there for two years or more, several hedge...

finance.yahoo.com

 

[AvidIndoorsman]

What are the true believers saying about the hedge funds on this?

Hedge funds bet on oil's 'big comeback' after pandemic hobbles producers

Hedge funds are turning bullish on oil once again, betting the pandemic and investors' environmental focus has severely damaged companies' ability to ramp up production. Such limitations on supply would push prices to multi-year highs and keep them there for two years or more, several hedge...

finance.yahoo.com

I'm skeptical of anything above $65, I'm not saying it couldn't run up higher for a week or so but I think $50-60 is more likely where it will stay.

Saudi
Russia
Biden making a deal with Iran
Venezuela...

I don't have any idea what these variables have in store.

Also I'm not so sure about this "They're decapitated from being able to grow".

 

[Irrelevant]

Good point. Knowing when to get out is the toughest part. I tend to exit too early, but I guess that is better than too late . Couple of things you can do is adjust the trailing stop-loss order. This is easier with stocks than options, but it means you NEVER sell at the top and always end up giving back some of those gains. Options have an added measure of difficulty in needing to get both the direction/event and timing right. The "general" rule on options is if the price goes down by 50% you cut and run. If the price goes up by 100% you either get out or sell half and play with house money.

that's been my problem, I exit early and leave a lot of profits. Sometimes that's not enough profit to cover some of my bad moves. Though really I just have one bad move that's really cost me. But getting out of LAC at 12 after 20% gains... then watching it go to 22 in the next week. Or getting out of Plug at 24, and it's at 65 now...

it feels like profits are my own worst enemy sometimes.

 

[BigHornRam]

I'm skeptical of anything above $65, I'm not saying it couldn't run up higher for a week or so but I think $50-60 is more likely where it will stay.

Saudi
Russia
Biden making a deal with Iran
Venezuela...

I don't have any idea what these variables have in store.

Also I'm not so sure about this "They're decapitated from being able to grow".

Reasonable speculative analysis, wllm. Thanks.

 

[BigHornRam]

I think world wide covid economic effects will have the biggest impact on oil prices though.

Tokyo Olympics 'unlikely to go ahead in 2021'

Former London 2012 Olympics boss says Tokyo event likely to be disrupted by Covid-19 pandemic.

www.bbc.com

 

[AvidIndoorsman]

I think world wide covid economic effects will have the biggest impact on oil prices though.

Tokyo Olympics 'unlikely to go ahead in 2021'

Former London 2012 Olympics boss says Tokyo event likely to be disrupted by Covid-19 pandemic.

www.bbc.com

Between holiday travel this year and the insane crowds at any “fun things” still open I think it’s as likely we see a spike in late 2021-early 2022 travel.

The market has gone up, the people who had the money to travel before have saved a lot of money... I bet my ticket to AK for spring bear in 2022 is going to sting.

Lift line at Vail Saturday... I think United stock is probably a good bet


I don’t know what to think about business travel and commuter travel.

 

[SAJ-99]

that's been my problem, I exit early and leave a lot of profits. Sometimes that's not enough profit to cover some of my bad moves. Though really I just have one bad move that's really cost me. But getting out of LAC at 12 after 20% gains... then watching it go to 22 in the next week. Or getting out of Plug at 24, and it's at 65 now...

it feels like profits are my own worst enemy sometimes.

Trailing stop might work for you if it is a long stock position. You have to figure out what feels better or worse. Not selling LAC at $26 or getting stopped out at $19. Both are better than the $12, so overall returns improve, but you still do the mental-game.

Basic rule, let your winners run and cut your losers early (first loss is best loss). Ease to say, hard to do. We love the dopamine release on taking a gain. What I hate most of all is a win turning into a loss. I have seen professional money managers do it too. They change their reason for holding and end up round tripping the stock. Everyone of them regretted it and couldn’t explain why they let it happen. I guess we are all influenced by the what evolution built into our brains.

 

[Treeshark]

Really interesting stuff, but to me that seems fraught with risk. Timing the market (even with individual stocks) is really difficult to pull off time and again.

Most stocks are just a small percentage of a business. If you base buying/selling stocks on the fundamentals of the business itself (does it have a competitive/durable advantage, does it deserve to go higher/lower, is it priced fairly etc...) it just seems like it would be easier to win over the long haul.

Question for you guys making a lot of moves quickly- how do you manage the tax side of things? Does that not substantially cut into your gains?

 

[SAJ-99]

Really interesting stuff, but to me that seems fraught with risk. Timing the market (even with individual stocks) is really difficult to pull off time and again.

Most stocks are just a small percentage of a business. If you base buying/selling stocks on the fundamentals of the business itself (does it have a competitive/durable advantage, does it deserve to go higher/lower, is it priced fairly etc...) it just seems like it would be easier to win over the long haul.

Question for you guys making a lot of moves quickly- how do you manage the tax side of things? Does that not substantially cut into your gains?

I admit I am a classically trained fundamental analyst, so I struggle with balancing business fundamentals versus price and valuations. But interest rates are close to zero, the government is giving money out to about 80% of US earners, foreign governments are buying stocks across the globe, and high ranking officials are saying that valuations don’t matter. Over the last few years narrative and resulting flow has dominated fundamentals. Ignoring price action (technicals) and flow info is practically irresponsible. I have no idea what is cheap or expensive, but it isn’t anywhere close to historical averages. When that changes, and it will eventually, I will change.

Regarding your question- taxes matter and you will pay them if you are successful.. Tax loss harvesting is important. I will put hedges on in the taxable account that are hedging my non-taxable retirement account, because they are usually a bad idea and end up losers.

 

[Treeshark]

Great point on stock valuations being crazy high (market overall), I agree. I think it’s a symptom of money really having nowhere else better to go right now. I have been wrestling with that lately, but equities still seem like the best option.

I appreciate you taking the time to respond!