Cash out refi to invest in stock market?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

How was that a sound decision? You were gambling and got lucky.

Wasn’t luck. There was and still is a massive short position that will gun the stock. Go on their website and look at the job postings they are a tech company with 1.4 billion in the bank. Main stream media paid fear campaigns are out of control on GameStop. Why ? Because the funds that pay that stand to lose the most on a squeeze. I sold some but have bought over half of my shares back. I should’ve never sold it’s not over the price is wrong

Dude shut up you are a clown

[Anonymous]

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

Lifechanging, fortuitous, and lucky, certainly.

SOUND??? No way in bloody heck.

[Anonymous]

Okay, that’s my signal. I’m out of this market.

[Anonymous]

It may complicate your taxes, as you likely won't be able to deduct interest on the portion of your new mortgage that exceeds your old mortgage. For this reason, it may often be better to take a larger mortgage in the first place.

Tax treatment aside, there's no real difference between "borrowing against your house" -- that is, increasing the amount of your mortgage -- and taking on a larger mortgage at purchase. So if you're contemplating increasing your mortgage from $X to $Y, the question to ask yourself is if you were buying your house today, would you finance $Y of the purchase price? $X? Some other amount?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

How was that a sound decision? You were gambling and got lucky.

Wasn’t luck. There was and still is a massive short position that will gun the stock. Go on their website and look at the job postings they are a tech company with 1.4 billion in the bank. Main stream media paid fear campaigns are out of control on GameStop. Why ? Because the funds that pay that stand to lose the most on a squeeze. I sold some but have bought over half of my shares back. I should’ve never sold it’s not over the price is wrong

Dude shut up you are a clown

Seriously. GameStop is a "tech" company because they sell video games? Hell no dude, they're a retail company in a doubly dying industry - brick and mortar retail is on its way out, and gaming is already well into its transition into 100% digital delivery which will destroy Gamestop's only actual profit center - used game sales.

The next generation of consoles won't even have disk drives and software licenses will never allow people to sell their digital games on the secondary market. GME is on life support.

[Anonymous]

OP, my corporate finance professor in my MBA program would say you've invented a magic money machine.

Imagine that -- borrow money at 3%, invest it and make returns at 10%, and you'll be rich! Why stop at $100k? Why not borrow $1 million?

The reason of course is risk. The market is no sure thing. If you invested in the S&P 500 as recently as Jan 2018, you'd be down 6.2% by the end of 2018. So you'd have not only that loss, but you'd be stuck paying back the loan of money you borrowed to invest. Even worse in 2008 -- the S*P lost 38.4% that year.

Think it's a one-year thing? The S&P lost 10%, 13%, 23% in years 2000-2002.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

How was that a sound decision? You were gambling and got lucky.

Wasn’t luck. There was and still is a massive short position that will gun the stock. Go on their website and look at the job postings they are a tech company with 1.4 billion in the bank. Main stream media paid fear campaigns are out of control on GameStop. Why ? Because the funds that pay that stand to lose the most on a squeeze. I sold some but have bought over half of my shares back. I should’ve never sold it’s not over the price is wrong

Dude shut up you are a clown

Seriously. GameStop is a "tech" company because they sell video games? Hell no dude, they're a retail company in a doubly dying industry - brick and mortar retail is on its way out, and gaming is already well into its transition into 100% digital delivery which will destroy Gamestop's only actual profit center - used game sales.

The next generation of consoles won't even have disk drives and software licenses will never allow people to sell their digital games on the secondary market. GME is on life support.

No kididng. HEre are GME's financials:
https://finance.yahoo.com/quote/GME/financials/

They lost 702mln in 2019, 399mln in 2020, and 237mln in 2021.

Consistent losses. The stock is being pumped up by emotion, not rational financial analysis.

[Anonymous]

Anonymous wrote:Okay, that’s my signal. I’m out of this market.

Right?!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

How was that a sound decision? You were gambling and got lucky.

Wasn’t luck. There was and still is a massive short position that will gun the stock. Go on their website and look at the job postings they are a tech company with 1.4 billion in the bank. Main stream media paid fear campaigns are out of control on GameStop. Why ? Because the funds that pay that stand to lose the most on a squeeze. I sold some but have bought over half of my shares back. I should’ve never sold it’s not over the price is wrong

Dude shut up you are a clown

Seriously. GameStop is a "tech" company because they sell video games? Hell no dude, they're a retail company in a doubly dying industry - brick and mortar retail is on its way out, and gaming is already well into its transition into 100% digital delivery which will destroy Gamestop's only actual profit center - used game sales.

The next generation of consoles won't even have disk drives and software licenses will never allow people to sell their digital games on the secondary market. GME is on life support.

No kididng. HEre are GME's financials:
https://finance.yahoo.com/quote/GME/financials/

They lost 702mln in 2019, 399mln in 2020, and 237mln in 2021.

Consistent losses. The stock is being pumped up by emotion, not rational financial analysis.


you are aware that every stock does not trade on fundamentals? Teslaan example. Tesla also shorted like Gamestop has had profitable quarters maybe 7 times out of last 48 reports yet it is over 1000 a share. Like half the growth stocks on any stock exchange have no profits.. maybe 75% of Nasdaq co's. When shorts are flushed out on GME they are forced to buy this is NOT a fundamental event. That total amount of shares is staggering, could easily be 200M. Why is GME still over $150 if the earnings numbers are bad? And "bad" is relative term look at the narrowing losses you have outlined! The market is "forward looking" a 2019 number is barely relevant. IF the cash burn was significant that could become an issue but as I stated 1.4 billion is in their bank accounts. Read about their Chairman an Activist investor ( 36 years old) named Ryan Cohen. Billionaire that is turning the company around. Shareowner to the tune of 9 million shares.

[Anonymous]

Anonymous wrote:It may complicate your taxes, as you likely won't be able to deduct interest on the portion of your new mortgage that exceeds your old mortgage. For this reason, it may often be better to take a larger mortgage in the first place.

Tax treatment aside, there's no real difference between "borrowing against your house" -- that is, increasing the amount of your mortgage -- and taking on a larger mortgage at purchase. So if you're contemplating increasing your mortgage from $X to $Y, the question to ask yourself is if you were buying your house today, would you finance $Y of the purchase price? $X? Some other amount?

How do they even check this? You get a single tax statement from the mortgage company, correct? What prevents you from deducting the entire mortgage when you itemize and how does the IRS check this unless the mortgage company also reports to the IRS the interest split between previous mortage and cash-out refi?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

How was that a sound decision? You were gambling and got lucky.

Wasn’t luck. There was and still is a massive short position that will gun the stock. Go on their website and look at the job postings they are a tech company with 1.4 billion in the bank. Main stream media paid fear campaigns are out of control on GameStop. Why ? Because the funds that pay that stand to lose the most on a squeeze. I sold some but have bought over half of my shares back. I should’ve never sold it’s not over the price is wrong

Dude shut up you are a clown

Seriously. GameStop is a "tech" company because they sell video games? Hell no dude, they're a retail company in a doubly dying industry - brick and mortar retail is on its way out, and gaming is already well into its transition into 100% digital delivery which will destroy Gamestop's only actual profit center - used game sales.

The next generation of consoles won't even have disk drives and software licenses will never allow people to sell their digital games on the secondary market. GME is on life support.

No kididng. HEre are GME's financials:
https://finance.yahoo.com/quote/GME/financials/

They lost 702mln in 2019, 399mln in 2020, and 237mln in 2021.

Consistent losses. The stock is being pumped up by emotion, not rational financial analysis.


you are aware that every stock does not trade on fundamentals? Teslaan example. Tesla also shorted like Gamestop has had profitable quarters maybe 7 times out of last 48 reports yet it is over 1000 a share. Like half the growth stocks on any stock exchange have no profits.. maybe 75% of Nasdaq co's. When shorts are flushed out on GME they are forced to buy this is NOT a fundamental event. That total amount of shares is staggering, could easily be 200M. Why is GME still over $150 if the earnings numbers are bad? And "bad" is relative term look at the narrowing losses you have outlined! The market is "forward looking" a 2019 number is barely relevant. IF the cash burn was significant that could become an issue but as I stated 1.4 billion is in their bank accounts. Read about their Chairman an Activist investor ( 36 years old) named Ryan Cohen. Billionaire that is turning the company around. Shareowner to the tune of 9 million shares.

Are you seriously comparing Gamestop to Tesla?

Tesla wasn't profitable because they were expanding their manufacturing base rapidly to meet demand that FAR exceeded their supply, and by all accounts will have consistent rising sales and profits as electric cars grab more and more market share.

Gamestop is literally the exact opposite. They're closing stores as fast as they can put the plywood over the windows, over 1,000 stores shuttered since 2019. The only reason their losses are narrowing is because they have fewer stores to bleed cash from.

[Anonymous]

Amazing that virtually everyone has said it's stupid to do a cash-out refinance to invest in the market, but everywhere else in this forum, it is an article of faith that one should never make additional principal payments on one's primary residence and should instead invest as much as possible in the market. Folks, when you invest in the market instead of paying down your mortgage, you are doing the EXACT SAME THING that the OP asked about!! I have always said that people's primary savings goal should always be to first pay off the mortgage on their primary residence (for the exact reasons mentioned in this thread), yet that idea is always met with scorn. Of course, averaged out, the market returns are higher than the 3% that you get from paying down your mortgage, but maximizing returns is for people that have already achieved some baseline stability - you don't play games when you don't even have a roof over your head secured!

Plus, we have been in a bull market for so long that many people have forgotten that markets can go down!

[Anonymous]

Anonymous wrote:Amazing that virtually everyone has said it's stupid to do a cash-out refinance to invest in the market, but everywhere else in this forum, it is an article of faith that one should never make additional principal payments on one's primary residence and should instead invest as much as possible in the market. Folks, when you invest in the market instead of paying down your mortgage, you are doing the EXACT SAME THING that the OP asked about!! I have always said that people's primary savings goal should always be to first pay off the mortgage on their primary residence (for the exact reasons mentioned in this thread), yet that idea is always met with scorn. Of course, averaged out, the market returns are higher than the 3% that you get from paying down your mortgage, but maximizing returns is for people that have already achieved some baseline stability - you don't play games when you don't even have a roof over your head secured!

Plus, we have been in a bull market for so long that many people have forgotten that markets can go down!

Uh it's not the same thing. OP is talking about taking out $ that you already paid. You're talking about paying extra. Both are stupid, what makes sense is to just pay your mortgage and then invest the rest in the market, vs paying extra. (Or taking $ out and putting it in the market--that seems too messy)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold a house, pocketed 150K and passed on the plan of putting that $ into a new house. I bought GameStop with the money, 4M later I think it was a sound decision

I want to be you! That’s amazing!

amonymous internet poster? don't believe everything you read.

Exactly. People claiming they made 4m on Gamestock are just making that up. Personally, we made 5m and that's fact. Maybe more when we finish counting it all as it's in rolls of 100s.

[Anonymous]

Anonymous wrote:Amazing that virtually everyone has said it's stupid to do a cash-out refinance to invest in the market, but everywhere else in this forum, it is an article of faith that one should never make additional principal payments on one's primary residence and should instead invest as much as possible in the market. Folks, when you invest in the market instead of paying down your mortgage, you are doing the EXACT SAME THING that the OP asked about!! I have always said that people's primary savings goal should always be to first pay off the mortgage on their primary residence (for the exact reasons mentioned in this thread), yet that idea is always met with scorn. Of course, averaged out, the market returns are higher than the 3% that you get from paying down your mortgage, but maximizing returns is for people that have already achieved some baseline stability - you don't play games when you don't even have a roof over your head secured!

Plus, we have been in a bull market for so long that many people have forgotten that markets can go down!

The obvious downside is that money becomes illiquid when you pay down your mortgage versus investing in a brokerage account. Even if you have to recognize a loss, you'll still have accessible money if you need it for an emergency. My preferred approach is to payoff the mortgage once I have enough in my brokerage account to pay it in full and still have a cushion for emergencies. YMMV.