(Reposted with their permission, but with their name removed)

I've seen a lot of posts from friends about stocks and stuff, mainly of course about the GameStop short squeeze phenomenon and cryptocurrency. This is gonna be a long post and pretty dry and some of my left wing friends won't like it. On that matter I can only say that surviving our system should be the most important consideration for folks out there and that Deng Xiaoping, a communist, said "Socialism is not pauperism." I'm writing this post mainly to discourage people from trading individual stocks with a majority of their holdings and that if you are going to do so then it should only be from a play money perspective. So if you've already decided that I should be beaten to death following an eight hour struggle session then I salute you and you can stop reading now. Disclaimer: while I was at one time licensed to trade securities I have let my certification lapse. I am not a financial advisor and any decision you make regarding you and your families future should be done after you consult one, preferably a fiduciary if you have a more risk averse attitude towards things. Okay, here goes.

The recent media blitz around GameStop and AMC has led to a lot of people getting burned and holding the bag as a result of a lot of Reddit posts and media attention. That particular saga is not over and those who are holding onto their shares may yet still profit. It's an interesting story with a lot of strange players and it's already been optioned for a movie. That said, one should not be making their decisions about their total financial future based on the advice of POTATOINMYASS420 and gaydicks69. You would think that would go without saying, but here we are.

Buying individual stocks and trying to "beat the market" that being trying to make large profits from research and expertise and then making bets that an individual company will outperform the broader market is a very quick method of losing all of your money. You hear stories about people who bought penny stocks or weed stocks or cryptocurrency and made out like bandits. These are true stories and good for them, but that will not be your story. These are outliers and get attention because they are interesting for the players involved and a tale gets better by the telling. While you may clean up one month you may be crying shirtless the next. The story of the hapless trader throwing themselves from a window after betting it all on Betamax is not without a kernel of truth, but given LEED energy standards they are typically swallowing a jar of pills rather than tossing themself out of the window which no longer opens. Don't let FOMO (fear of missing out) lead you to make a mistake which could seriously impact you and yours. Picking individual stocks is fun, but you should only do with with a small amount of your net worth. So called "sophisticated investors" typically have 10 percent of their assets in things like individual stocks and things called "alternative investments", and that's a whole other kettle of fish. If you are just getting started you should not be doing this. You aren't smarter than all of the quantitative guys out there, shit, I'm not and I live and breathe stuff like this. So if you want to go play on a hot tip a friend gave you then fine, but follow this cardinal rule, the same one I use at the track: " Never bet more than you can afford to lose." And when I say lose I mean LOSE. If you are playing the market, literally playing it then you are at a casino and should treat it as such.

So what do I do you're asking. You know that putting it in the bank doesn't do shit to grow it and it feels like you're spinning your wheels. That's where modern portfolio theory comes in. A balanced portfolio has about 40 percent of your money in whole of market equities, 20 percent in emerging market equities, and the rest with the exception of a little cash for fees in government bonds and fixed income securities. What does all that mean? It means you are buying a piece of the entire economy, which means that you are exposed to every sector of the huge engine that is predominantly North American, South American, and European business. You are also buying a piece of the bonds that are guaranteed by the government. Is this without risk? Surely not. The market goes up and down in jitters and fits and starts and every ten years it goes blooey, just like it did in 2000, 2008, and 2020. But it typically goes up and up and up. If you were the unluckiest investor of all time and you put in a lump sum the day before all three of those big drops and if you did not sell and rode it out you would still have just over 3 times what you put in. Which brings me to rule number two: never make an investment or buy a stock that you are not willing to hold for 10 years. Everyone who sold in 2008 and in March 2020 lost big, and those who didn't were pretty much okay. I know what you're thinking: "This isn't the firebrand <NAME> I know who is this reasonable sob who sounds like my dad?" Well if your dad sounds like this then they are a realist, and so am I. That's why the patient person wins in this game and the impatient one doesn't. Not to say someone who was 65 last year shouldn't have pulled out of the market. I get why they would get scared so close to retirement. But if you're reading this odds are that you're not sixty five.

So where do you go to get this nice and safe little turtle that could investment portfolio? This isn't an ad but the most straightforward, reputable, and Canadian based outfit is called wealthsimple. For almost everyone reading this wondering what to do with some bucks that is the best bet for you. You transfer your little bundle in there and set it up so you can toss in whatever you want each month. If you put it in there set up that autodeposit and then FORGET ABOUT IT. Even if another big downturn happens the powers that be are not going to throw their hands up and say "We have no choice, we must abandon capitalism". That's not going to happen. They will literally fight a fucking nuclear war to prevent that from happening. They will kill their own people to prevent that from happening. You have seen that they will do it, I have seen that they will do it, and its a god damn fact that when push comes to shove that they will do it. To put it in perspective when things went nuclear in 2008 people lost a lot and it took two years for them to get back to where they were, but after that they would have tripled their money even if they didn't throw more in each month. That's a cold hard fact.

The reason I'm writing all this is because I have had people reach out to me about this new stock craze and I give a fuck about my friends. If you're going to talk to a financial advisor about your future, which you should, talk to a few and compare what they say. A bunch of you have kids now and are thinking about their future. That's great. But don't bet it on meme stocks or crypto. Have your fun! Open up a little trading account with 1000 if you have it laying around! You can't learn without burning your fingers, but don't mess around with weird stuff like options and derivatives and shitty penny stocks to chase a dream. There are a lot of sad stories out there involving people doing just that.

One other point: if you have done well in the markets this year good for you, now would be a good time to take profits and reposition/rebalance. But if you are speaking from that position to shit on people, humblebrag, and cosplay as Warren Buffet Jr. on Facebook then you are an odious piece of shit that needs a head slap. Don't try to portray the literal trust fund you have which vested this year that your parents set up as some indicator of your shrewd understanding of the markets. Its arch cringe bro.

"Be greedy when others are fearful and be fearful when others are greedy." - Warren Buffet, the Oracle of Omaha

"To grow rich is glorious." - Deng Xiaoping, former Chairman of the Standing Committee of the Politiburo of the Communist Party of China