Cousin wants stock picking advice

[Financial.Velociraptor]

My buddy bought some Shell stock when it tanked and Made 100k in 3 weeks. I am thinking of putting some of my 401k in an IRA and buying stock. Do you suggest anything? I know you do this stuff. I am clueless 😂
I was thinking United Airlines would probably be a good one since it’s down from $90 and it’s $31 right now.

I'll admit to being a stock picker but its clear to me she just wants to gamble (and her buddy gambled BIG on a super risky stock).  I'll tell the board what I told her and everyone else who asks me for stock picking advice, "If you have to ask how to pick stocks, the answer is you need to index."

[Wrenchturner]

Some people like to think wishfully, and they're the type that think they can beat the market.  At least you could point her to some typical cookie-cutter investment strategies to get started.  Most people that succeed beating the market probably know their personal shortcomings inside and out, and have good insight into what the market is neglecting.  This should be understood to be exceptional.  Perhaps you can encourage her to develop her cautious side before she develops her risk-tolerant side when it comes to investing/trading.  It seems like a Dunning-Kruger problem.

WTI seemed like a good buy at $23.

[J Boogie]

You can also give decent advice by telling people to buy the stocks of the 5 companies whose value added goods/services they would have to be paid the most $$ to STOP using if it's even possible to stop using them at all. And then don't sell until you decide you CAN live without them as a consumer.

I added the phrase "value added" because I'll take my water heater over my prime account any day of the week but I sure as hell would rather invest in AMZN than AOS. But TBH I don't know and don't really care what brand my water heater as none have a monopoly on heating up large volumes of water. But Amazon is the only way I'm getting something 2 days later without paying extra for shipping.

This will often guide them to invest in the FANG stocks - which are not only solid investments, but seem on trajectory to continue beating the S&P.

[trollwithamustache]

I have one buddy who has to be right, so whatever you toss out there, he's got to pick it apart. He is the only guy I give ideas to for the criticism.

[Steeze]

I came here for HOT stock picks

[talltexan]

I couldn't imagine telling someone to do something, then having them lose money.

That doesn't mean that I don't do dumb things that cost me money.

Those are two different things.

[ctuser1]

In the bricks-and-morters real world - loads of people often ask me about stock picking advice. These are friends, acquaintances, other parents at the PTA meet, and even kids schoolteachers.

(I guess the fact that I have worked at hedge funds, and can talk some intelligent sounding stuff about the financial markets makes laypeople think I must be some sort of a stock-picking wizard.)

I always tell them:
1. I used to try and pick stocks. I had 3 winning picks out of, maybe, 20 odd that I did purchase over time 10+ years ago. Because of those 3, I kept pace with SP500 and maybe slightly beat it at times since 2010. If I take the period from 2005, my stock picking portfolio under-performed. Thanks to Fidelity Contrafund, however, my retirement portfolio did not.
2. I no longer pick stocks. I put all money into SP500 or VT/VTI or some total world index.
3. That I would recommend stock picking *only* if you can do the same due diligence you would do when purchasing a business. I.e. spend at least 6m-1Y researching the company and it's markets so that you know ins and outs of it, and plan to hold it for at least 10-20 years.

Usually, this bores them to death and they stop asking me for stock picking advice. If any of you have figured out a more "interesting" way to deliver this message - then please let me know.

[Morning Glory]

Tell her to leave her 401k the fuck alone and put some of her fun money in a Robinhood account. Money she used to spend on coffee out or new shoes. Instead of buying lipstick she can buy a share of the company that makes the lipstick.  Instead of buying the latest iPhone she can buy a share of apple, etc. It will increase her savings rate, even if it's suboptimal.

[talltexan]

Back in 2015-2017, I was a frequent Starbucks customer and thought it would be cool to own enough of the company that my dividends would pay for my purchases. It turns out I could have made a lot of money doing this.

Instead, my dividends pay for my purchases now, as both are $0.

[NorCal]

I tell people how I first started investing. I had an internship at a Venture Fund back in 2007. I worked with some really smart guys that bought and sold businesses for a living, and they loved to pick stocks.

I spent 2007 investing in Chilean Copper mines, internet infrastructure companies, and aircraft leasing companies.

2008 was not kind to me  I think I lost over 60% of my portfolio, and it did not rebound with the market.

I now keep 90% of my money in index’s. I’ve made a few tiny investments in a venture fund and a real estate development project, but these are pretty minor in the grand scale of things.

[brooklynmoney]

Tell her she should trade options not stocks. She could make even more $$$$! haha

[Steeze]

Tell her she should trade options not stocks. She could make even more $$$$! haha

Send her a link to r/wallstreetbets

[jinga nation]

Tell her she should trade options not stocks. She could make even more $$$$! haha

Send her a link to r/wallstreetbets

Bravo, those self-proclaimed autists at r/wsb can help. LOL!

My experience when asked by my wife's or my cousins, depending on the country of their residence: BogleHeads 3 or 4-fund lazy portfolio. If want something simpler, VTSAX-equivalent. Something simpler still? Contact a hedge fund and leave me alone forever.

Simply, why do you want to spend 90% of your time on picking stocks or active funds and hoping to achieve x+0.5% returns (ignoring the downside) when you could spend less than 10% of your time with VTSAX or SP500 index fund, or a simple lazy portfolio, and rebalance in auto/3/6/12-month intervals, while getting x% returns, with less downside risks?

Deaf ears, the lot of my relatives. Radio silence easier to maintain. Or ignore their spurious noisy pleas for "advice".

[Louisville]

Some people know so little about investing that they think the terms "investing" and "picking stocks" are synonymous.