Let's do some arithmetic, close February 1, 2008 to close January 30, 2009:
2-1-08 1-31-09 return
IBKR 35.47 15.27 -56.9%
S&P500 1395.42 825.88 -40.8%
GOOG 515.90 338.53 -34.4%
Fact is folks, that when holding a stock, there are thought to be two risks: systemic risk, and risk that is specific to the instrument. The index being down 40% shows us what the system did. The remaining 16.1% loss is the extra risk and extra loss that IBKR common shareholders took and suffered holding the stock. GOOG was down only 34.4% over the period above. Long GOOG and short the rest of the S & P 500 would have made money.
By the way, this analysis could have been done in a less generous way by using the DOW 30 or NASDAQ as the index, as they both did a few points better than the S & P 500. In addition, those holding the stocks comprising any of those three indexes would have received dividend income over the past year as well. IBKR pays no dividend.
The message is clear here: do not listen to pump and dump schemesters, and do not hold IBKR.
I'll second that one! You are correct. We are in for an almost endless series of new all time lows ending at ZERO. Companies that are the worst at what they do, like IB, rarely improve, if ever. They tend to follow the same path to failure while declaring that somehow the environment in which they operate is the real problem. The IB customer is at fault for their worst in the industry service. When they make a bad trade and lose dozens of millions of dollars in one shot (lack of qualified employees) they blame some imaginary conspiracy and claim that the loss is actually an asset.
You see this with GM where the CEO spent many years whining on CNBC about the "challenging environment" while other companies had fantastic success in their fantastic environment. Now GM is down the drain because they never did change their evil ways. They imagined they could keep screwing the customers and somehow it would be OK whenever the "environment" improved.
In case I don't get to tell you before your sudden demise, goodbye IB. When you go out I expect their will be no prior notice. One day you will simply be shut down forever while maintaining the illusion that you are OK. Hopefully any shareholders who can't afford to lose any more money with you will have sold before then.
IBKR continues to underperform. Today, the S & P 500 was down 2.36%, while the NASDAQ was down .98%. IBKR was down a whopping 3.10%.
QUESTION FOR THE IBKR LONGS: Would you buy a car that drove slower than all of the other cars on the road? Some of you would, actually, as you are indeed holding IBKR.
"QUESTION FOR THE IBKR LONGS: Would you buy a car that drove slower than all of the other cars on the road? Some of you would, actually, as you are indeed holding IBKR. "
Your example is imperfect. The hare was beating the tortoise for a while...but then the tables turned. Temporary underperformance (or 'volatility') is not a consideration for an investor. It means absolutely NOTHING. In fact, one must temporarily underperform in order to do better than average (which is the S&P500).
That's what kind of analysis you get from somebody who thinks writing Excel Macros is programming.
Check the XLF brain-dead. XLF is down 69% while IBKR is down "only" 58. That's a +11 as compared to the relevant index.
There is no debate here. The XLF index is the financial sector spider, and therefore is not diversified enough to be a proxy for systemic risk. The S & P 500 is of course an excellent proxy for systemic risk. It beat IBKR by a whopping 16.1%, that value representing the instrument specific risk that IBKR shareholders took and were not compensated for taking. Not even by a meager dividend. Total debacle.
I have zero uses for excuses, and zero uses for pump and dump schemesters who don't even know that writing Excel macros is indeed programming.
Interesting debate. Some say it is unwise to lose money. I agree. Others claim that if someone else lost even more than you, then whatever you lost on is a great investment. In other words, when you retire and have bills to pay, instead of using dollars, write up some little papers explaining that you did a lot better than some other a-holes who did even worse. I am sure that will be legal tender everywhere.
Without a dividend it can not be considered an investment because there is no intrinsic value whatsoever. It is speculation at best, and in this case it has been steadily collapsing. Once might trade something like this, either long or short. Trading implies getting out with any profit at all. Anyone who tells you that this is some sort of long term investment thinks you are very stupid. If the only way to make anything on a long position is by selling the shares, then the stupidest thing in the world would be to buy and hold long term. If you do that you deserve to lose everything.
The shares might only be held by people who are compensated with restricted shares - until the day they can sell, plus some of the management losers, plus anyone they can use to prop up the shares, like vendors who won't get their business unless they participate in the scheme.