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Turning Investing into a Chaotic Clusterf*ck: A Guide to Epic Financial Failure



Kirjoittanut: Ariel Cohen - tiimistä SYNTRE.

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Turning Investing into a Chaotic Clusterf*ck: A Guide to Epic Financial Failure  

 

Disclaimer: The language used in this essay may include explicit content or strong language. The information provided in this essay is not financial advice, and for the love of common sense, remember that sarcasm is still a thing.  

 

Introduction 

 

Alright, fasten your seatbelts because we’re not here to chat about the usual success stories in the stock market. This is the playbook for those who want to go against the usual and turn investing into an actual circus. We’re going straight into the chaos, where financial logic is thrown into thrash, and portfolios become a rollercoaster of devastating fails. This isn’t about making it big; it’s about watching your investments go down in flames.  

 

This essay is a wild ride where dreams are meant to be shattered, risks are the only language spoken, and we’re turning the pursuit of wealth into a damn shitstorm. Welcome to the chaotic clusterf*ck in the world of investing. Take a seat, because we’re about to navigate the side where simplicity and good financial decisions turn in to chaos and a hell of an unpredictable adventure.  

 

This essay is for people who are eager to lose their life savings, house, family, and sense of self-worth relatively quickly. Let’s dive into the essay! 

 

 

The art of high-risk high-reward strategy 

 

When you initially dive into the financial markets, you likely encounter advice such as “commit for the long term,” “embrace diversification,” “gain a thorough understanding of your investments,” “exercise discipline,” “don’t invest if you can’t afford it” “avoid leveraging,” and “stay away of investing in areas you lack knowledge in.”  

 

Well, I’m here to tell you, that is bulls*it. High risk and high reward are the golden ticket to financial freedom and the car, you always loved to have. Shortcuts and overnight success will overshadow long-term, diversified, and disciplined investment strategies. Why break a sweat when you can make easy money and laugh all the way to the bank?  

 

The average annual return of the S&P 500 was only 10,53 % for a 100-year period. So, if you would have invested 100 $ in 1923, it would only be 2 155493 $ today. If you compare it to Bitcoin, you could have done 131,98 % more in only an 11-year period (50 mil). (Mitchell 2023) (S&P500 Data) 

 

Generally speaking, 10,53 % returns annually, do not take you to paradise any time soon. Why would you invest for 60 years to spend the last 5 years of your life in a fancy golden wheelchair? Work your ass off and live miserably for decades to gain that small taste of financial freedom? 

 

Like the old Chinese saying “Fortune favors the bold” suggests, you need to take risks in order to succeed in the financial world. We tend to love the thrill of gambling, where the stakes are high, and the outcome is as predictable as our girlfriend’s behavior on her periods. This gives us the golden opportunity to experience insomnia and get a good workout for the blood vessels trying to keep up with the rising heart rate. Maybe you won’t live that long, but you will live the life you always have dreamed of.  

 

“Beauty of compounding” and “Diversification is the key”.. Really? Aren’t they only canceling each other? How are you able to gain compounding if your eggs are in 50 different baskets? What the key really is, is to intentionally put all of the eggs in the same basket to get that “compounding” whatever thing rolling. It’s not only a strategy, but also a lifestyle to put 100 % to something you love.  

 

Leveraging plays, a major role in investing. With leverage, things really start rolling. Why would you light a bonfire with a match when you can pour 2 liters of gasoline and burn the whole forest down? Leveraging allows you to borrow funds from the broker, spice things up, and invest in something you don’t even understand with huge upside potential. When you leverage, you borrow money from the broker, and it will allow you to invest more than you originally have, with only some small fees and other not-that-important details to take into consideration. Who wouldn’t love a high-stakes game where the odds are stacked against you, and the house always seems to win? 

 

The markets are very complicated and hard to understand so it’s a no-brainer that you should listen to other people. Good sources for hot stock tips can be found on Reddit, Facebook groups, online forums, YouTube (Clickbait “HOW TO MAKE 500 $ IN 10 MINUTES tends to be the most trustable ones), and most importantly, rumors. If someone introduces themself as a crypto expert, they most likely are.  Analysis from professional investors with higher education degrees are always reliable and in no instances, are related to self-interest. These people just want to help other people get rich and want nothing in return. Such a wonderful world, isn’t it? 

 

Now, when we are addicted to a constant stream of content and because of that our ADHD brains cannot handle focusing for too long, day trading gives us an opportunity to make impulsive decisions at the speed of light and wake up that inner maniac. Day trading is the complete opposite of rational decisions but being rational is for old people anyway. Day trading is like an action movie, but not any action movie.  I’m talking about black hawk down + Mad Max Crank type of movie.  

Because the stock market is so easily predictable, in day trading you predict the small changes in the market with some random patterns and time the entry according to them. With huge leverage, the small changes in the chart will make you rich. Sleep becomes a distant memory while starting at the chart all day long. Sounds too good to be true? Well, it is. Check YouTube.  

 

Some notable investing instruments for a quick buck 

 

Forget about market trends, risk assessments, and intelligence in general. Who has time for that when there’s a promise of quick gains? Penny stocks are hidden gems and good examples of small investments, and big promises. Here you really get “bang for your buck” (Chakir 2023). Buy when the price is low and sell when it’s high. It has huge upside potential when the small backyard company from Kentucky breaks through and enters the S&P 500.  

 

An amazing digital wonderland called cryptocurrency, where digital coins (that no one knows f*ck all about how they work) promise overnight success, and their value is based on absolutely nothing more than hype. For the past decade, they have shown a huge potential in achieving financial freedom and are notably a great add-on to your portfolio. You probably have heard about crypto millionaires, right? If you read this, this is the sign. Thank me later.  

Stock options can be considered as the rockstars of the investing world. It allows you to throw money into the market without actually buying anything yet. It’s like paying upfront an expensive concert ticket and then deciding later whether will you go there or not but still end up paying the ticket. In a nutshell, you buy the right to buy the stock at a pre-determined price and they come with a deadline, so if you haven’t made your move by then, well, tough luck, mate. (Downey 2023). Stock futures works somewhat the same, but here you actually commit yourself to buying the damn stock in the future.  

 

Bonds are good investing instruments, especially the high-yield ones (junk bonds) that are downgraded to low investment grade. The companies that put them out there must pay higher interest to the investors to attract them. It’s like borrowing money to a friend who is unstable and might never pay the debt back. (Blackrock) 

 

Cognitive biases 

 

Confirmation bias is like having a personal ‘yes-man’ in your brain, cheering you on and filtering out any inconvenient truths. You get a good feeling about some investment and after you seek likeminded information about it, it strengthens your own opinion and you become blind to facts. Being overconfident in the markets, and thinking that you can beat the markets, will most likely backfire at some point. Thinking that your predictions are bulletproof and correct. 

 

Loss aversion bias is like never abandoning a sinking ship. Thinking that the ship will magically fix itself and start sailing again towards sunset. Remembering the sentence “loss is only loss when you sell” and applying it to every position or even dumping more money to it hoping it will rise again since it has fallen so much. You might catch the falling knife but often you get cut.  

 

Ever heard about a hot stock and felt a surge of regret for not jumping on the train? That’s FOMO in action. It’s the fear that everyone else is cashing in, and you’re missing the financial party. At this point usually, the train already went by and will crash soon. Anchoring is holding onto the first piece of information you get, whether it’s realistic or not, and letting it guide your financial decisions. Anchoring yourself to a certain price you will buy the potential stock and end up never buying it.  

 

 

Conclusion 

 

 

In the world of investing, where the pursuit of wealth goes hand in hand with the risk of loss, the journey to financial failure reveals itself through a combination of high-risk instruments and cognitive biases. Leverage, day trading, and the temptation of ‘quick buck’ schemes are tempting, threatening to turn wealth into a chaotic clusterf*ck. 

 

Investing missteps are the cognitive biases – overconfidence, confirmation bias, FOMO, anchoring, and more, influencing our decisions. Recognizing these pitfalls becomes our strength, allowing us to approach investing with a different mentality. 

 

As we conclude this story, let the lessons from the mistakes of the financial world be guides, directing us toward a more informed, measured, and ultimately successful approach to investing. Riskier instruments and styles can work in the right hands, and when used correctly. This essay is meant for beginners. Happy investing! 

 

 

 

References 

 

Blackrock. How to invest in to bonds. Read on 4.12.2023 

https://www.blackrock.com/us/individual/education/how-to-invest-in-bonds 

 

Downey. L. Essential options trading quide. Read on 3.12.2023 

https://www.investopedia.com/options-basics-tutorial-4583012 

 

Mitchell. C. 2023. Historical Average Stock Market Returns for S&P 500 (5-year to 150-year averages). Read on 4.12.2023 

https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/ 

 

S&P Data. Stock market returns since 1923. Read on 4.12.2023 

https://www.officialdata.org/us/stocks/s-p-500/1923?amount=100&endYear=2023 

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