Hmmm.. wow!! Did I strike a nerve on the comment on Harta?

Anyway do yourself a favour. If someone suggests a 'theory' to you, for example, do not average down, run back tests. Test it out yourself. If it holds true it holds true. If it doesn't, it doesn't. Do your own study... look at the data.

anyway here's the post on Netflix again. I noted someone said my method of CBM was wrong. I am supposed to buy the same dollar amount every time. Would the math come out different? ( )



2017 Buys 1,000 shares at 165,95
2018 Buys 0.66521 shares at 249.47
2019 Buys 0.612927 shares at 270.75
2020 Buys 0.488603 shares at 332.83
2021 Buys 0.339526 shares at 488.77
2022 Buys 0.976751 shares at 169.90

each year spending exactly 165.95.

Total shares 4,093
Total invested amount is 995.70

Based on 178.89, the value of the shares is only worth 732.1998

end result is still the same.

Again, this is what the data showed.






This post has been edited by Boon3: Jun 24 2022, 06:03 AM

Firestarter you.

The point is this...

Do think about that.

Now did I chose Netflix to prove my point? Maybe. Suggestion was do CBM on a big cap stock. Suggestion was also the go-go invincible FANG stocks. I chose Netflix. Well, you have the right to suggest I am guilty. No problem. But remember, in the Netflix example, handicap was given - purchases were made only at around each of the year lows. (in real life, that's almost impossible)


But think about the math behind all this CBM. Continuous Buying method where one buys a stock constantly over a period of time.

For me, I know my common sense says it probably won't work ...

1. It took the fundamental of the stock out of the equation. In real life, Fundamental of the stock is crucial. Yes, there are few stocks that perform rather well over a long period of time but in general, a lot of stocks, fundamentals changes - either the company own management or the economics of the business changes.

2. the math....

a) if the stock increases over time, a CBM will see the buyer constantly adding up. The average cost will increase. Simple math says so. One could also use the earlier example on NVIDIA. Where the CBM (again using the benefit of magically buying at the lowest price each year) increased the average cost price each year. Of course, the result will still show a win but at a cost of having a significant buying price.

b) if the stock decreases over time? Okay, Guilty. I was lazy. Or I cheated. I used BAT as an example. But the end result showed magnified losses if one buys every year, and again at the lowest possible price.

3. Okay, not so sure about doing more tests. If time permits, I will. But I don't think it will be healthy. End of the day, if you don't believe what I had suggested, run your own tests. This is what I personally do myself. Last time, ppl say Maybank is a fantastic dividend stock. But I ran the test, using the hypothesis of buying at the lowest possible price and if one bought and held Mayank since 2013, the result would shown that the dividend investment in Maybank loses out to the benchmark of EPF dividends.

4. Finally, when will it end.

If I prove the same thing on TSLA, someone would suggest another stock.... hahaha... tak habis la...

TA discussions lagi susah la... and lagi

If I suggest TA is good for you, wouldn't you want to run some millions of tests on it?

No problem. I respect your right of opinion.

However, how about this. Since I had shown some examples of why CBM failed, why don't you show me back an example of CBM working?

If index, I already told you I would STFU la.


let me do, the first one suggested earlier. TSLA

Walauehhh.... be a bit nicer can ah?

if you refer earlier posting...

greypj said..



TSLA was first on the list.

If I ignore, then also considered cheat?

Then WHEN can I test out your gut?

Ok this one last one...

** if anyone insist on buying constant $ each year - please enter data into excel sheet *

TSLA - buying 1,000 shares at lowest price each year

2017 buys 1,000 shares at 61.31
2018 buys 1,000 shares at 52.65
2019 buys 1,000 shares at 44.37
2020 buys 1,000 shares at 83.51
2021 buys 1,000 shares at 580.88
2022 buys 1,000 shares at 650.28

my data was from the chart posted on msn.money.

https://www.msn.com/en-my/money/stockdetail...tp&duration=Max

if any mistakes, please feel free to correct.



Total shares bought at 6,000
Total investment 1473
Total average per share = 245.50

As per post #10611

The initial buy in was 61.31.
Due to the CBM, average buying price became became 245.50

And again, as mentioned, the result will show a win but at what cost?
Is it justifiable to use CBM and see the cost go from 61.31 to 245.50?

LOL! Only 3 stocks, boss?

Nah... your 3 stocks.







I am lazy...

but your CHOSEN 3 stocks will show the same result with TSLA, NVIDiA....

the average cost price would have increase significantly if one uses a CBM of buying 1,000 shares at the lowest price each year.


You have the right not to believe.... and if you do not believe, feel free to check yourself.



======================================================

so think about it....

we are looking at back test on stocks on stocks on the back of a very, very strong bull run.

time has gone by.
business economics are changing.
the inflation.
the interest rates.
the war. Not only the russian war but the (trade) war between US and China.

Organized chaos..

haven't heard that in a long time.

But isn't this THE OTHER point?

You We won't know what will happen!

And if we don't know what will happen, what's the upside to buying so long into the future? Dare we say something like 'Netflix lost of subscribers' would not not happen?

stock goes up, we end up adding significantly to our average price.
stock goes down, we end up magnifying our losses.

Eh? Putting 1,000 is simple for eyes mah... no need to add in the extra division into the excel table.

Didn't I show in the Netflix example?

Where the amount put per purchase is the same?

let me paste again.... hehe... is okay...



Changed the 1,000 shares buy in... but result still the same.


Portfolio? LOL! Aiyoh... I don't think you want me to start talk 3 talk 4 long long in it. This one... you not pening, meh?

Nice shot!


Sorry to break your heart but I have never bought any UT before.

That would be logical.

But perhaps adding the criteria of no declining profits/fundamentals in the stock.




but then..... ..... we wouldn't be having this nice little chat, would we?

For someone, the one, the very elite few, who really makes money with Maybank's investment... errr..... I cannot be showing you too much.

LOL!

Everything needs conclusion one meh?

Basically I could have said try not to D** into stocks.

There is really no upside with such buying strategy.

stock goes up, we end up adding significantly to our average price.
stock goes down, we end up magnifying our losses.



there.... after that.... you can draw that picture out of the wall or color it anyhow you want.

LOL!

Nakal you. Don't add roses and lavender into my drawing la...