> They expect the problem to worsen. The stock market has climbed 23% this year...
The problem will resolve itself if (when?) the market crashes.
I remember the run up to the dot-com bust. I was too much of a bumpkin at the time to even know how I would trade stocks — but I listened to an acquaintance go on and on about how much he was making on the market.
At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
In time, especially after the next bubble in 2008 when I had become more savvy, I came to see this guy as having been in the market at a time when even a monkey throwing darts could look like Warren Buffet.
So too I think are many of today's investors. (I would include myself but perhaps not: I have been won over by Boglism, a balanced portfolio, infrequent trading, etc.)
The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life. Almost nobody who “saw the crash coming” in the case of the dotcom bubble, or covid, or the subprime crisis made any money, because almost nobody gets the timing or magnitude of the crash right. You can find YouTube channels that have been warning people that a crash is imminent for the last two years. If you had been out of the market for the last two years you would have missed historical gains, and for what? The magnitude of the crash you’re protecting yourself from would now have to be impractically huge for you to come out ahead.
Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
Agreed this sort of advice is standard - but many people don’t follow it because it’s boring.
One way to make this sort of advice “not boring” is to apply the advice to 90% of your net worth (or cash flow), but then give yourself permission to “gamble” with the other 10%.
For me, that has fulfilled my personal interest in playing around in the markets for fun while still building/growing a traditional “safe” portfolio at the same time.
I remember at one point a couple years ago, I saw a thread on the Bogleheads forum where people could basically call their shot on market crashes; they would post and timestamp when they exited the market and when they re-entered, so that people could go and calculate if the timing was correct or if they lost money by missing out on market growth.
I might not have the dates correct, but I remember the general strokes of one guy who decided in like 2017 or something that the market had topped out, the crash was coming any moment now, and he sold everything and called his shot. He missed out on three years of incredible gains, and then the market absolutely _crashed_ in early 2020. He got it right, by a very small amount; he had gotten more selling his positions than he would have gotten selling in march 2020. He buys back in at what ended up being the absolute nadir of the market in like april 2020 or something. The rare success story of timing the market, you love to see it.
And then a few days later, he decides that actually, no, the market still has more to drop, and he sells again. Oh well.
This is the reason dollar-cost-averaging works. You buy less (shares) when the market is high, and more when it is low, without thinking about it and without trying to "time" your transactions (which almost always fails unless you have inside info).
> The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life.
What do you think is the root cause for this kind of thinking? It is hard-wired from childhood, or borne of (difficult) experiences?
> Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
This assumes that you are talking about the US stock market. Most other stock markets are far slower to recover from economic downturns and crises. Why? Their economies are less dynamic and their political leaders are more fearful of difficult (economic policy) changes.
> The stock market is a mechanism for transferring wealth from the impatient to the patient - Warren Buffett
> For 240 years it's been a terrible mistake to bet against America - Warren Buffett
Lastly: The Nikkei 225 (Japan's most important equity index) peaked in 1990, then took 30+ years to recover.
Also: Look at Mainland China since it was opened to (direct) foreign investment in the last 15 years. Overall: The Mainland China economy has grown a lot, but their stock market is a terrible place to invest.
I just always buy and never sell until the leadership and the board of the company appear to be going full retard. And not in a good way like Netflix pivoting to streaming in 2006 but like HP in 2006. Haha.
The Gov't / Federal Reserve has made it clear they will not let the value of assets drop significantly ever again. The entire planet's capital is now betting on US equities going up and to right forever, and all levers will be used and invented wholesale from nothing to keep that going.
This implies that a sustained crash will only happen if/when these two institutions are no longer capable of supporting the market. In effect, it's a bet against the US, which so far has been a losing one.
There's more to assets than US equities, the Fed would be far more concerned with serious weakness in the Treasury market, and Treasuries often move inverse of US equities.
I wonder if this sets up a moral hazard that only exacerbates a possibly coming crash. People assume the Fed will prevent assets from dropping, which makes them bid up asset prices to even higher levels that even the Fed is incapable of maintaining.
Yea, except the inflation we encountered in the last 3 years were directly from trying to keep asset values from dropping. They are at their ropes end. There really isn't that much room between mass inflation vs. the rich keeping their numbers infinity growing.
> At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
You lucked out by mistakingly believing he was intelligent. The classic scenario is when your neighbor is obviously an idiot, making tremendous amounts of money in the market, and you have to explain to your spouse why you can't/won't emulate them. That's when even bright, (normally) level-headed people start piling in before the bubble bursts.
> The problem will resolve itself if (when?) the market crashes.
Someone said something like, Everyone thinks they're a genius, when the market only goes up.
Although, one thing different now is the heavy throughout-the-day manipulation of retail investors, effectively making strong social groups and identities around it.
That wasn't a thing when, say, ETrade started, and lots of people dabbled, and found it was hard to lose money, just trading around different companies, with little understanding of how things even supposedly work, much less how things actually worked.
Today, from what I occasionally glimpse, you've got all these supposed skills you're applying as a retail investor/sheep/pawn (including various degrees of snake oil, or thinking you're going to be one of the smarter people on a pump/dump scheme that leaves others holding the bag), and constant social groups where people even self-deprecatingly celebrate huge day-trading losses. Like a wholesome support group that actively encourages you to stick with the bad habit, rather than encourages you to stay sober.
So maybe, when the next big culling comes, you'll have lots of people who can somehow still get margin accounts, and will say, "Blood in the streets, and I'm missing 3 limbs, but, hey, stocks are on sale!" And a thundering chorus of other addicts, and their manipulators, encouraging them.
(Disclosures: S&P 500 ETF with low expense ratio in tax-advantaged, plus an emergency fund that goes nowhere near the market. :)
I've yet to really land on my opinion of the idea of a pending market crash with how much money printing has gone on.
All the standard indicators I look at really line up with the idea that a crash should be coming, or should already have happened. Companies aren't valued based on the fundamentals anymore, for example, and yet here we are.
Its starting to feel more like the perpetually increasing market, despite the fundamentals, is a sign of how weak printing and inflation is making the dollar. Stocks can go up when the companies are worth more (ideally because they are producing more), but prices can also go up because the currency used to value the stocks is taking a serious hit.
This is easy to say but the reality is being a monkey and throwing money in the market over the last 15 years would have made you f u money. Yet most people never did it.
So who is the genius: the guy who remains on the sidelines and eventually is proved right or the guy who remained in the market and did face a brutal correction.
One thing I've learned about myself is that I'll never be the guy on the right end of that mid curve meme so I might as well lean in on being on the left.
I've worked as a software engineer for various investment banks. The best quote and investment advice I've heard on those engagements is "Only monkey's pick bottoms"
Middle of the road, risk managed funds are our best chance of financial success, not individually predicting the market dynamics.
A market crash won’t be a silver bullet. I’ve known several gambling addicts and that’s not how addiction works. They don’t just stop because they lose a bunch of money. They always hold out hope they’ll be able to win everything back “next time”.
> Seeing all kinds of warning signs from family members who never traded or got into crypto until just this past 6 months.
That's just jealousy, Those who sit on the sidelines complain the most. Like I said in my previous post if you didn't see it. I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%.
Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
Personally I got into this when the stock market crashed in 2020 and I made shit loads. There are big winners during crashes too, some of the biggest wins.
I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%.
Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
Many criticize the retail investor for treating the stock market like gambling, but I think it really does resemble gambling more than investing these days.
How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their market caps continue to climb?
“Value investing” is dead for most, picking a company that you believe will generate solid long-term revenue is no longer interesting. You need to figure out what is going to 10x tomorrow.
There are things that we could do to slow down the public equity markets and re-establish the relationship between stock price and business fundamentals, but that’s not what almost anyone wants.
I think the bigger problem is having a rational basis for choosing a company and believing in its revenue prospects. It's probably gotten harder now that companies much more commonly reinvest their profits in the company or into stock buybacks, rather than paying a dividend, for tax reasons. (Modulo the tax effects, paying a dividend vs letting the stock appreciate should be a wash, but it's harder to evaluate the current fair value of a stock when your evaluation is based on the expectation of that fair value changing over time.)
The key tenant of value investing is that there exist companies which based on their financial metrics are fundamentally under valued by the market (in opposition to what market price efficiency predicts).
From there, an insane market should provide you with even more opportunities to value invest.
We'll look back and see with clear eyes the transient phenomena that made strange and magical meme stocks and unicorns what they all were. Somewhere in the last 50 years stock investing turned from green-eye-shade economic analysis to a social phenomena that couldn't be bothered with dividends and profits.
I go to the supermarket and milk is on sale, I buy two. But momo clowns go and see milk is on sale and they try to sell the milk they have on hand back to the store. They don't act like the products they buy have fundamental value, because in many cases that value was inflated wildly beyond justification long before the trader ever got started.
I mean, it’s widely understood. There was deregulation in the ‘80s that kicked off the financialization trend (along with private industry customs being invented like Jack Welch’s whole chasing shareholder value uber alles shtick), and then the interest rates cuts in the wake of the 2008 recession (and then again during the pandemic) superheated this kind of behavior.
The thing is, picking a company that actually will generate solid long-term revenue isn't really a thing. You can try, but your success rate, if you're good at it, is going to be about equal to the success rate of companies. There are dozens of studies of professional traders showing this. If you're bad at it, you'll buy into the companies that are pure hype and do worse. And... you probably aren't good at it. Most people aren't.
The people who beat the market consistently have information you don't. Instances of people who call major trends before they happen and get rich are likely survivor bias and not genius.
things haven't changed since vanguard started index funds 5 decades ago. buying and holding diversified assets prevents you from thinking "You need to figure out what is going to 10x tomorrow."
I think the reality is the "don't try to be smart, do these low-risk things because statistically you're too stupid to beat the market" has logic to it, and stats to back it up. But the unspoken part is, "let the rich do that stuff, and their wealth advisors and folks on the golf courses".
So there's an elitist aspect to telling people to back off. We all know people who made a killing on individual stocks, either because they bought them or they worked at a company that issued them.
It's not really elitist. Picking individual stocks is essentially saying "I have brand new insight that nobody else has, and I'm going to earn profit by incorporating that knowledge into prices and be rewarded forgetting it right". This is clearly a very specialized activity, you shouldn't expect to be able to bring brand new, accurate insight, and out predict everyone else in the world, without a deep understanding of economics, finance, and expertise in the specific industry and the company you're trading in. It's no more elitist to say "most people should just buy index funds" than it is to say "most people should just get root canals done by dentists rather than doing it themselves".
So... literally survivorship bias, and insider trading. Great, neither of those make me think I'm arrogant or smart enough to day trade. Nothing about this is elitist.
I've made a killing on 'X' by getting in early and holding over the years. Not one single person in my life knows the details because I want zero responsibility for them getting wrapped up in it, and I know how hard it is for people to be patient and hold when they're chasing a high, I mean profits.
I lost my life savings chasing the dopamine hit and can relate to this. I'm in my mid 30s and suffering from career burnout. I know I can't afford a home when I can barely work full-time so I figured I'd trade. I was up, and up and up!
Then I was down, then up, then down.
One morning I woke up and I was so down, I sold out of fear.
Now I'm left with so little I might as well be starting from scratch.
This feels like gambling and here I thought I was smarter than those people that lost in casinos.
My experience, with a wide variety of generally older friends & associates & such -
If they're talking about an occasional visit to the casino, people will be up front about the fact that they walked into the place with $X in their pocket, and walked out with $Y. Almost always, $X > $Y.
If they're talking about stocks they've bought, people will be incredibly selective, and describe only some of their greatest successes. They could lose money in a rising market, and you'd have to carefully question them to even realize that fact.
Which is ridiculous because while casinos are engineered to ensure $x > $y over time, economies are existentially dependent on the reverse being true over time and across a broad enough portfolio.
Folks you can just buy the S&P 500 and wait. It really is that simple. Money will go down sometimes, up sometimes, down some more, but in the long run it will almost certainly go up. And if it doesn't, the world is crumbling anyway so who cares?
Heh, I'm kind of the opposite. I like talking about the time I gambled with a couple thousand on options and after a rollercoaster experience, lost it.
But my index funds are not an interesting topic, imo.
At this point I’m just watching a slightly younger cohort of men repeat all of my worst digital addiction mistakes like getting inserted into the online video game -> toxic online behavior pipeline (or worse, fascism), ideologies (Musk), crypto and options gambling (thanks Reddit a la 2013 for all of the crypto communities and WSB) too much computer (ouch, my neck, arms and back.)
I’m not doing particularly well, especially mentally, despite having tons of opportunity and successes. Worried about the younger cohorts, but I guess that is a tale as old as time.
I feel like the patterns are more or less the same but the cycles are getting shorter and more pronounced.
I met the son of a family friend today, he's 13, already has an opinion about the Israel/Palestine war and spent $500 in roblox so far, they're not wealthy at all. Back in my days I was stuck in the free to play parts of mmorpgs (or had to beg for months for a $5 monthly membership), playing tf2 (free) and had 0 political ideas or even knew people who cared about politics
When I was 13 I had a paper route and mowed lawns, and with those earnings I spent about $75 per month on video games and comic books, easily exceeding $500 over a year.
It's normal for 13 year olds to have strong opinions on such topics - they have plenty of time to refine them or even change their mind.
I would be more worried about those who by this age didn't develop any interest in geopolitics - it affects them all the same but they typically don't understand why and pick whatever source tells a more compelling story.
$500 in Roblox? that's a lot of money for a 13 year old and that money could likely be spent elsewhere... As far as the opinion about Israel/Palestine it's likely that opinion is inherited from family or cohort and it's not fully their own.
If you don't have decades of built up propaganda it's pretty easy to see that Israel is the bad guy. The condescending "it's complicated" line is part of the propaganda telling you that you're not allowed to come to the obvious conclusion for yourself. My 10 year has figured out that Russia is the bad guy in Ukraine and that Israel is the bad guy in Gaza.
Are they also drinking tons of soda? I can’t believe how much I used to drink. I don’t touch any drink with sugar (other than lactose/latte) nowadays. It’s so disgusting, don’t know how I ever did it in the first place.
Broad brushstrokes incoming and pure speculation but I wrote it out anyway…
Today’s youth are more proactive with their identities these days than we were. We were and remain reactive with our identities. That preference influences what triggers the dopamine hits needed for life.
The drugs of a reactive identity culture are sugar, alcohol, narcotics, work, anything that’s a trope in movies made by boomers. These drugs have consequences that shape the user’s identity. For example: weight gain or burnout.
But the drugs of a proactive identity culture are those that drive the person’s perception of their identity. The live ahead of the consequences. Things like digital social networks, status symbols like shoes, colleges, or jobs, and anything that drives success in those status symbols. Example: Adderall helps the user study, which helps the user get better grades, which opens the door to a better college, which allows the user to flaunt that college association as part of their identity. That doesn’t mean there aren’t consequences to those drugs but those consequences aren’t tropes of modern life just yet because we’re still normalizing their outcomes.
All of this to say: sodas aren’t their thing because soda is “unhealthy” and that drags on their identity.
People want a chance to get rich. They also want excitement.
Doesn't that say more about our jobs that are
a) dead-end for most
b) financially limiting, with a salary that goes up slowly, if at all, unless you find a new job
People want the chance to win, and some meaning, and some daily purpose.
No one cares anymore about the stats of "stock pickers" "day traders" and other arguments for DCAing into index funds and not touching it until you're 65. A 60/40 portfolio. Don't time the market. Efficient market hypothesis. We live in a new world now, and people are willing to gamble. Sentiment is obvious for the average person to get a sense, and they trade on sentiment.
Maybe give people new meaning somehow, or a chance to make unscheduled money other than the slow-as-molasses salary increases.
I don't necessarily call all risky stock activity gambling. At the risk of splitting hairs, it's a little different to buy Tesla stock because of, for the sake of argument, let's say a really bad reason (CEO smart, car go fast), i.e. uninformed, than it is to bet on a number on a roulette wheel.
I think we paint it as gambling because gambling has an aura of naughty judgment about it, as in, "Oh, you're just gambling because you made an uninformed stock purchase." I'd prefer the term speculating or risky stock picking. Gambling, which is banned in many places and is against the law in religious texts, has a taboo because it's addictive. I daresay only a minority of stock trading bros are addicted in that way.
Child rearing is a possible solution—it is our evolutionary “purpose” to reproduce, after all, and most people in the developed world today aren’t doing it.
A bit off-topic, but it’s interesting how this became the de-facto answer to any question related to “meaning of life” in the last 2-3 years in HN/tech circles. I’m not saying you’re wrong, but it’s a bit weird. Like I’m sure everyone knows that? If a person isn’t having a child in their 30s, they either can’t because of multitude of different reasons, or they decided they don’t want to.
Disclaimer: I’m as pro-kid as you can get, just haven’t met a partner who would be on the same page as me yet.
When I was talking about it with my friends, our guess is, people with kids are getting worried. If others aren’t having kids, then their kids might suffer big time in a long run, thus the renewed pressure to keep suggesting the idea to others. Obviously this doesn’t relate to you, just weird how it started in the last few years.
Yes evolution selects for having children survive to reproduce, but that’s not a purpose, that’s just “that which continues, continues”.
> and most people in the developed world today aren’t doing it.
Plenty of species have evolved such that when they sufficiently saturafe their environment and resource carrying capacity, reproduction rates drop through behavior changes based on various signals.
>Child rearing is a possible solution—it is our evolutionary “purpose” to reproduce, after all, and most people in the developed world today aren’t doing it.
I doubt it, that's because to most people it does not feel purposeful, it's a chore. Most people who say it's purposeful are generally the most vocal ones, and I suspect the minority.
The replies are bit harsh. It is a solution to meaningless of life. I am reminded constantly by some of my friends.
But it's also a problem for some. For example, it means moving out of expensive cities, it means worrying about making lots of money (if you live in the U.S.), it means child care is thousands a month, it means health care is thousands a month. It means you have to be responsible and not drink every day. It means potentially not sleeping for a year.
Personally, seeing the stress of my workmates, and how they became more dependent on their jobs, on the shit of the jobs, and how now they're more competitive on the job, and worried... I'd personally choose to write that off.
But I know people who found meaning through child-rearing, as you say!
This is the best answer. From a strictly rational perspective, parenthood makes little sense. The negatives are obvious and intimidating, while the benefits (which are not rational but instinctual) are less clear. Happily, oxytocin is a helluva drug. It will rearrange your universe in the course of an hour, such that all of its substance revolves around a splotchy, squinty little ape.
If you have the math chops, you should really try to get into it just so you can realize you are not going to make a money making algorithm. I got knee deep into it out of boredom during Covid and was able to have the "aha" moment where you realize the best you can do is buy index funds or just long hold companies you believe in that are in your area of expertise.
Extremely solid advice. As someone who has worked at a trading company that makes the big bucks, I can say you (as a single investor) will never consistently beat the market on any remotely interesting instrument. The sheer resources the institutional traders put in is mind boggling. You must understand that you truly are gambling in the face of such a sophisticated opponent. The quicker you understand, the better (hopefully without losing your life savings first). And don't even think about derivatives, you will get eaten up and spat out like you can't imagine.
RenTech was founded by legit signals processing guys who cut their teeth breaking codes for the NSA and basically invented ML for the stock market. They also built the best dataset in the world (at the time) for stock info as a competitive advantage. There's no real way to duplicate what they did today when everyone else is already doing quant trades to take advantage of suckers.
If the gains are huge, it's either temporary luck or they're cheating. You cannot have long term high alpha without either. If you meet a person who can constantly flip a coin heads side up, ask them to keep going and they'll either fail or you'll find the coin is rigged.
I tried for a long time with stocks, then I tried stock options. I eventually moved off to index and treasury futures. No money to be made in stocks, shitty leverage, high fees, LOUSY TAX TREATMENT and to complicate matters further shorting can be problematic. Also no "real" market is open 24h so you really just get to trade open-to-close standard hours. Stocks just have too many things going against you to make any money and thats before you figure your broker is front running you in the first place.
My basic strategy is that the signal/news/data contains no real information beyond whether or not people are buying or selling. When they stop selling I start buying and vice versa. Use your data skills to identify "things that work with regularity" and "things that rarely ever work" while at the same time understanding "literally any strategy works SOMETIMES".
Develop a roughly asymmetric strategy where your average gain is greater than your average loss per trade. The biggest thing you need is to pick some BIG WIN trades and ride them for a large profit. A small percentage of big wins pay for the losers and make the whole thing profitable. Remember that you "Make more money" by trading larger quantities, not by seeking larger moves. You don't "make money" so much as you harvest what the market gives you and if its not giving you close the trade. Your chosen trading system should reflect this.
Size your trades such that if you're betting N shares with $Y dollars now and you take a loss, you're coming back to the table with at least N shares and $Y dollars. Never loose $100 and find yourself in the position of recovering that loss with only $50 to play with. Read about "money management" in gambling for some ideas heres.
Don't be afraid of the short side either as you will make about half your money there. Don't be afraid to bet agains the trend and "call bullshit" on a move - your system should be designed to detect the success rates of these calls and should be looking for those situations.
For me its about using data to make bets where, in the event I win, I win pretty big and in the event I lose, I lose minimally.
USE BRACKET ORDERS FOR ALL POSITIONS OR PERISH.
AUTOMATE YOUR STRATEGY OR PERISH.
ALWAYS TAKE YOUR TRADES OR PERISH.
Making profitable trades here and there is EASY - keeping the money you made on those is the hard part.
EDIT: If you're concerned about "slippage" you have a bad strategy. If the strategy can be undone by a .75pt slip then you need to consider something else.
EDIT: Don't be seduced by the High Frequency Trading bullshit. You don't have the infrastructure for this and the fastest safest Rust code you can write is still connected to some slow retail trading infra here. Plenty of money to be made in Low Freq mode. 20 trades a month per instrument is a lot of trades a month!
If you worked in a tech office in the late 90’s, every other guy had Ameritrade or similar up in a window. It was the gaming/porn you could get away with at work.
Wasn't it still $10/trade back then? That adds user friction, which discourages the gambling aspect much more than "free" trades provided by Robinhood (free as in they'll sell your order flow data to third parties).
I pay my brokerage about that, which is fine, as it works out as less than 0.1% of my average deal - and it’s usually at least five years between a buy and a sell.
When people complain about brokerage fees, or are pleased that their brokerage charge no fees, it usually means they will be losing their shirt at some point.
Volatility trading is for masochists on actual cocaine, and suckers.
As did 2008. A bull market is a hell of a drug, as it were. And yes, we're probably headed for another big correction in the near to medium term future.
There are structural changes that make it much easier to convert trading into gambling. Feeless trades and easy access to margin accounts and more advanced vehicles means that you can easily make dozens of high risk trades in a single day.
I wonder if this could, in a manner of speaking, be a "rational" choice that indicates a breakdown in society. That is to say, perhaps some of what we are seeing is that younger people have concluded that the only way to live a decent life in America is to become rich and becoming rich mostly comes down to luck. If gambling is the only way to get a decent life then they may as well gamble. If they lose, then they were already going to have a bad life anyways.
Some guy wrote a book recently and claimed that about 10% of workforce-eligible men are long term out of the workforce, due to some type of disability. Also 50% either aren't engaged at work or don't really do anything essential, meaning their job could disappear and it wouldn't be a huge impact.
I think this is and overlooked factor. Though living standards have not fallen, the perceived risk of it falling is probably at an all time high. We got rid of pretty much all cultural safety nets, and now people are desperate to replace the lost security.
The regular 9-to-5 is seen as a last resort now—it’s almost like you’ve failed if you don’t have a side hustle. That’s the vibe. With AI and machine learning platforms making waves, especially for traders, the game has completely changed. The barrier to entry? Practically gone. These platforms have made it so easy to get started that anyone with a bit of curiosity can jump in.
It’s not the exclusive playground of the Wall Street elite anymore. What used to be this tightly guarded world of algorithms and insider knowledge is now available to anyone willing to dive in. People are out here making bank, and they’re getting good at it. Trading isn’t just something “some people” do—it’s turning into a thriving industry where regular folks are learning the ropes and doing well for themselves.
This whole shift has made the traditional career path feel outdated. Why settle for clocking in and out when you can leverage tools and tech to build something for yourself? The idea of just sticking to the 9-to-5 feels like giving up when the opportunities to create and grow are right there, waiting.
It's funny because 9-5 is still a great way to actually enrich yourself. The best way to grow your wealth is to increase your income, and a salary+benefits is the juiciest way to do that.
Sadly, I've seen many male friends of mine obsess with the stock market but not have anything going career-wise. They just hope they hit big and "make it." Better to just stack salary for years the boring way and save yourself the time it takes to micromanage investments.
9-5 is definitely not the way to enrich yourself, that's an unfortunate message. Have you noticed how housing costs have consistently beat inflation for decades? At least if you live in a VHCOL area. It's easy - check the FRED report on the median salary and compare that with a graph showing the median housing price.
OK so the most important thing is out of reach with 9-5, independence from rent. The next set of factors like health care, and if you have a kid child care and health care, are also up compared to wages (9-5 wages).
That leaves just food and entertainment. I suppose you could live with roommates, eat frugally and not go out. And then maybe the 9-5 is the way to become rich.
For most of us the way to build wealth is through asset appreciation - housing , stocks. The 9-5 is the 'not so passive income' that you use day-to-day while you either SAVE up for the 'assets' (if you're lucky), or you gamble / inherit / get lucky with these assets.
Also, the second best way to enrich yourself in America is probably buying a home. But you need a down payment and the ability to afford it over the 30y mortgage.
Gambling on stocks may give you a windfall that amounts to a down payment, but good luck convincing the bank you can pay that new mortgage for 30y off your stock market wizardry.
> Trading isn’t just something “some people” do—it’s turning into a thriving industry where regular folks are learning the ropes and doing well for themselves.
Said every forex / options / crypto course seller ever.
Anybody remember the "Day Trade your way out of Debt" late night infomercials in the '90s?
Jeez, I've heard all this and much about online trading portals 2 decades ago. They weren't incorrect, anybody could trade, even alghoritmically. AI isnt bringing anything added for regular users that others dont have, so nothing.
You make your own priorities and risks, as do we. Your comment anyway reads like some cheap marketing for clueless folks on the back of a bus just before bubble bursts.
Anyone selling the retail investor an "edge" via ML platforms or AI is selling snake oil. Sure the barrier to entry is low, but profits are never guaranteed.
The other day at the store, in my smaaaall hometown, I overheard the cashier and an older man discuss crypto while I was waiting for my turn. They were discussing meme-coins they gambled on. Super weird to hear irl.
The supposed "survey" or whatever the hell this is was taken from a bunch of amateur people who started trading out of boredom which depicts an entirely non-real picture of the people who have been doing this for a living since quite some time. Like with everything else, using your brain cells can quickly make you realize it's a lot more than "gambling"
> Like with everything else, using your brain cells can quickly make you realize it's a lot more than "gambling"
Which sounds similar to how gambling addicts report their thoughts on their addiction - that they are smart enough to learn poker, or they know enough basketball to be able to predict outcomes.
Like with everything else, some research and data interpretation shows that with the remarkable exception of two or three highly specialized companies that employ some of the best mathematicians alive, most active investors underperform.
This comment should not be greyed out. See the Buffett Bet [1] for the most famous example of this.
Warren Buffet bet a million against Ted Seides (head of Protege at the time) that a simple index fund investment would outperform any handpicked selection of hedge funds over a decade. And critically this bet was made in 2008 just before the market crashed! That's when hedge funds should disproportionately shine, as per their name, by hedging. In the end it wasn't even close.
>Which sounds similar to how gambling addicts report their thoughts on their addiction - that they are smart enough to learn poker, or they know enough basketball to be able to predict outcomes.
Some people are smart enough to learn poker, and build careers out of them. And there are many books on poker. You picked a poor example.
> a bunch of amateur people who started trading out of boredom
Former options market maker. The industry was dead for a decade until the pandemic. It’s now more profitable than ever. Lots of negative-alpha orders that can be predictably sorted from the flow. Market makers are seeing casino-like margins on some subsets of flow; that signals a problem.
It's hilarious watching the r/Superstonks subreddit live in a pretend reality. Supposedly Citadel is their sworn enemy but they've spent the past 4 years purposely buying badly priced shares from them.
How do you educate someone so confidently and consistently wrong in their world? Someone who INSISTS that "No, this letter from BBBY that says that we are going to see massive share dilution when 500k new shares are printed and sold to pay down debts before the company is shut down, is a lie because they actually are going to magically transform into a new competitor against Amazon because Ryan Cohen (a man who was only part of BBBY for like a month) is going to be the new CEO and make us all rich"
When those shares dropped at an obviously stupid price with zero future value, they bought them by the hundreds and LITERALLY wrote "thank you for the tasty dip"
There are plenty of people who are trading with a strategy. There are also oodles of people who are engaging with trading in precisely the same way that somebody engages with sports betting. And various platforms are using similar marketing and ux strategies as betting platforms to encourage this.
Coincidentially today I've just finished reading: "The Little Book on Common Sense Investing" by John Bogle. What's described in the article is exactly the opposite of what people should be doing if interested in serious investing. The book mostly focus on index funds and I highly recommend its reading to anyone who wants to understand and embark on investing seriously. The book is short, extremely easy to read, full of examples, wise advices and quotes from remarkable people of the investment sector.
* US economy has been growing steadily, and will do so for the foreseeable future
* Index funds are still a great way to invest your money
And more importantly,
* Most people suck at picking stocks (including the average Joe, mutual fund managers, YouTube/TikTok influencers and "stock analysts"). It's better to just leave it to the market, aka SPY(VOO)/VTI etc., and have good sleep.
After losing my first chunk of cash during 2000 .COM crash I became be quite contrarian. Thought real estate is way too high, thought the stock market is nuts, bitcoin is a scam. Turns out the big crash never happened and everything ket going up. Three years ago for some reason I jumped into the stock market, bought a house, bought some bitcoin. Turns out so far the gains have been life changing. If I ever get laid off,I may be able to just call it quits and retire.
I still think the whole thing doesn't make sense but it seems economic fundamentals don't work anymore. Everything is a bubble.
You went long on some fairly general assets. That's not gambling.
The problem with gamblers is (for example) making risky bets on margin and ending up losing massive amounts of money because a meme stock lost 5% of its value during a normal market fluctuation.
Same. Friends who just threw money at stuff are millionaires, and I'm... not. Hard to just put the money in and expect more back when it took so much hard work to get in the first place.
okay I don't comment on here often, can check my post history, but absolutely would not sell your bitcoin any time soon considering we have a pro crypto president and have an approx 40% chance of a bitcoin strategic reserve within the first 100 days. terrible advice tbh.
Good insured real estate is always a good safe bet. The best conservative investment that current & few past gens could have done while being completely clueless about stocks, markets, politics etc.
People need to live someplace to be just part of society and also to just survive, plus there is emotional and status aspect. Western construction is lagging behind population growth in popular places plus running / ran out of good space. Do the math.
I've done the math for a bunch of properties family and friends have owned, and they were never beating index funds.
Do the math and you'll find that putting your money in an index fund almost always beats real estate, with much less risk and much less work.
It's easy for one property to underperform the market by a lot. It's hard for an index fund to do the same.
I own a $1.5M rental home in a luxury destination and profoundly regret it. The amount of work I put into it was enormous. I'm not outperforming the market, and I can't sell it because the mortgage rate is 2%.
I am not so sure. An article is on the front page of the WSJ (online) about property taxes and insurance becoming more than the mortgage payments.
In parts of the country there's a crash in the works (Sunbelt, Florida in particular).
Where I live renting is substantially cheaper than buying, by thousands a month. You are absolutely better off buying a mutual fund with the difference and enjoying the flexibility of having cash.
I am not so sure what is going on in the housing market, but there is so little inventory in the hotspots, and what appears to be a dump in the no-longer-hot-spots, that it's scarier than buying stocks right now.
My estimate is that I've earned approximately $3/hour for the time I've spent doing so. And I was trading in such thinly traded options that it wasn't a matter of "scaling up" - I was literally only able to make money because I was picking up the pennies nobody else cared about.
(And/or trading on events that were were rare, obvious, and in an area I understood, which also doesn't scale)
Good fun and educational. Not quitting my day job. Because, of course, if you do the math on it, I've lost money playing the market relative to almost any other use of my time unless you consider it an investment in education and entertainment.
Folks have an unhealthy mentality about beating the market, imo. You don’t need to beat the market if you’re not a fund manager trying to advertise your record. You just need to do well.
The market is up 27% YTD. Most global trends suggest, to me, a greater centralization of wealth into the US. Just dumping everything into the SP500 is likely more than great for 99% of people for the near future.
Every so often I receive commercially sensitive information about my company which I'm not allowed to disclose before it's formally communicated to the stock market. For fun, I try to predict what impact it'll have on the share price (though of course I can't actually trade!)
I can successfully predict the direction of the share price movement 50% of the time and successfully predict the magnitude of the share price movement 0% of the time.
Maybe consider using a stock market simulator, make trades based on inside information, and see where you end up in one year? That would be interesting.
In the beginning, I donated about $10k to Wall Street. Got smarter, went to university for first finance, then economics. Learned to actually trade. Crushed the market, made nearly $100k annually with starting capital of only $30k. Then realized my life expenses were a significant part of that, I didn't have enough capital to grow it fast enough to both live life and accumulate capital to make trading more worthwhile than simply getting a job with that education. Getting a job + having easy passive investments (like a market fund) was less hours, less stress and more profitable than being a full time trader starting with a middling amount of capital. Also trading is less fulfilling than things like building, entrepreneurship, having a normal job plus hobbies, etc... Lots of traditional entrepreneurial paths also beat the market pretty handily.
It's good story but entrepreneurialism is a lot more than just a chosen career path, like teacher, software developer, product manager. It requires ideas, networking or connections, and usually capital.
And then that leaves working the 9-5 (or if you're in IT it's more like 8 to 6), and maybe getting 10-20% of your salary in bonus at the end of the year.
Ugh. I vividly remember when my stepfather tried to get me involved. He was retired, and had a nice nest egg built up from a small business. He was a smart man.
But he was paying thousands of dollars per year for a monthly newsletter that contained <some brand of analysis>. And he patiently showed me how he started with a row in the table that met <his criteria> then followed to the column that met <other criteria> and that was the choice he made in the market.
And I'm thinking, whatever information he's getting in that newsletter is at least a month old by the time he gets it. And he's not doing anything a program couldn't do, with the information in digital form. And he should know that -- he was a computer programmer earlier in life. As far as I could see, there was zero chance he was beating anyone or anything with that technique, and starting in a several thousand dollar hole.
The market is a mind game. If enough market participants care about it, then it defacto becomes a signal to be aware of.
In fact if you're a trader (not a long term investor) that manages to make money in the markets you will by definition use some form of technical analysis.
I don't know OP but 3k can be a significant amount of money for some people esp when younger. I realise people often lose more, but that can also be because they have more money padding to lose.
From mine, all I remember was getting the impression that putting money in particular stocks without knowing what you're doing is a bad idea. Pretty valuable lesson, I guess, as I've never bought individual stocks since then...
A 3k bankroll isn’t remotely close to enough working capital to employ any kind of useful risk management strategy and get any kind of return worth the bother.
Right but if you are wrong you are only out 3k. Many people with more money think they have a good strategy and lose a lot before they realize it wasn't bad luck and risk management but a bad idea.
Eh, I started with not much more than that (£5k) about ten years ago, and now have an eight figure equities portfolio, built entirely from that seed capital.
All buy & hold forever, layered sell-off, buy the next thing, take some profit for me and the taxman. Enough moved into stable instruments (bonds, real estate) that I can afford to lose the whole shebang.
So yeah, $3k is plenty, if you buy inevitable winners. Just… look at the broad sweep of the future and buy supply chains. Shovels in a gold rush and all that.
I've taken comfort in the thought that there are millions of people much more clever than me. If they have not figured out how to game the market there's no chance I will.
But that's not true in the world of stocks. If all the stocks go up, all of the owners are richer. And they do tend to go up, at least on average.. in recent history.
The futures and options markets are zero-sum. For every winner, there's an equal and opposite loser.
The most difficult part about the stock market is that stocks don't move for the reasons people think.
People think fundamentals, news, financial performance, or chart patterns matter. But none of it does.
Markets are driven purely by supply and demand. And in this case, supply and demand for the stock itself.
Fundamentals are already priced in. Financial performance is already priced in. Expectations are priced in, and others probably have more information than you anyway. Other people also watch chart patterns and place their bets based on that.
What you're betting on is whether the market is right, or wrong. Or whether other investors will think the market is right or wrong.
Edit - the other part of it is that Wall Street firms hire tons of people who are incredibly smart, have math, economics and finance degrees or even PhDs, hire software engineers and spend hundreds of millions on infrastructure just to know the market better than you. You're not smarter than all those people put together.
In the long term fundamentals will matter. But the market can remain irrational longer than you can remain solvent.
Ordinarily I would say that an investment in a broad index for the long term (a decade or more) is always wise, and there's no point in trying to time it more specifically than that. However right now it's been irrationally exuberant for a long time. it's going to have to correct itself... Either tomorrow or another ten years.
Depends. If the fundamentals are already good, they're priced in, you probably have little upside, even long term. Maybe you'll just match the market. You have to think the fundamentals will improve over time more than the market expects to beat the market.
Long term, I think economics has more to do with market performance. Stocks rise as the money supply expands and capital has no where else to go.
The market is definitely efficient. Try to find arbitrage opportunities (which is what actual market inefficiency is); they disappear in milliseconds.
What you're saying is that it's not infallible as far as predictive power is concerned, which is true. But every current bit of knowledge is definitely priced in.
I don't think it's as easy as "supply / demand" and everything is priced in.
There's many forces at play here, and many different ways to play the game.
Markets are not that efficient, not everything is priced in. Earnings would have 0 effect on price if that was the case for example.
Whether you play the market on higher timeframes or on lower timeframes, different factors come in to play.
I think it's obvious that chart patterns are a thing, (shameless plug here: i'm building https://edgefound.xyz, an app to create and backtest complex trading setups).
It's actually interesting how many patterns (or setups) repeat across markets and timeframes. Mostly because prices are set by traders and traders react in the same way to the same events / price movements.
> Expectations are priced in, and others probably have more information than you anyway.
I have always made money on the stock market. I bought Nvidia in December 2022 and then again in April 2023. Yes the information was out there - anyone reading this board back then could see it. Or who saw Emad Mostaque's tweets that Stable Diffusion was trained on Nvidia, or who knew the semi-public information that OpenAI trained on Nvidia. I bought and it quadrupled in two years when averaging out. The expectations on this board were not priced in the market then.
When FAANG and more b2b tech companies (Salesforce, Oracle) tanked in 2022 I poured money into tech indexes like IYW and IGV. Not as much as into Nvidia, but they were good companies and finally and unusually cheap. They went way up too.
I was making money in the 1990s buying SGI, Sun Microsystems, Netscape, Cisco etc. No brainers for me.
Only two losses I recall - Cascade, a router company whose stock dipped and was bought ny US Robotics on the dip (1990s?). Also some ad company which was crushed by competition with Google.
I completely disagree with your premise. I don't even know how to make a neural network in Pytorch, nor can I do matrix math with NumPy. But in December 2022 Nvidia seemed worth the risk, and by April of last year a lot of that risk evaporated with a huge potential upside. I knew the stock was cheap and all the PhDs on Wall Street did not. Also, they are stuck in a bureaucracy - I used to work in IT for a major investment bank in Manhattan. Watch the Big Short on the pressure the people who were right got from their management and investors. I don't have that pressure, it is my money.
We, the people here, do get insights which are not priced in. It's not that there is no risk, but the coin flip sometimes goes 51% in our favor. Sometimes even 52% (or 53%...or 60%). This is how Warren Buffett, Peter Lynch etc. made money.
Read the Wall Street analyses from the middle of last year on AMD being a big Nvidia competitor, then read the posts here this week about how AMD engineers don't have boards to fix bugs. "We the customer had to mail the AMD engineer a spare board to fix the bug". The cobbler's children wear no shoes at AMD. Then go read some Wall Street report about the stiff competition Nvidia faces from AMD. The information is here, not in the Wall Street analysis report by people who know less than me about how transformers work.
> Read the Wall Street analyses from the middle of last year on AMD being a big Nvidia competitor, then read the posts here this week about how AMD engineers don't have boards to fix bugs. "We the customer had to mail the AMD engineer a spare board to fix the bug". The cobbler's children wear no shoes at AMD. Then go read some Wall Street report about the stiff competition Nvidia faces from AMD. The information is here, not in the Wall Street analysis report by people who know less than me about how transformers work.
Are you saying that AMD will not be a serious competitor to NVIDIA?
This is known as the Efficient Market Hypothesis, and having an edge against this requires specialization and focus in specific industries in which you have significant knowledge. That, or learning to recognize when the market is surprised by an outcome, and acting fast.
I’m old enough to remember when you couldn’t just buy one share (you had to by a “lot” of 100), and when I actually received a paper stock certificate that I had to sign and mail to my broker. Rubes will try to beat the market and one in 1000 will succeed. Ignore them and follow the basics. I’ve been investing since the 80s and all my peers that did the boring thing are retiring comfortably.
I remember a controversial scamming figure in Italy that made millions by selling lucky numbers for lotteries or exploiting people's stupidity to part them with their life savings.
Her motto was "idiots _have_ to be scammed".
While this figure was morally and ethically deplorable, it always made me think how her motto essentially implied that there was an element of pure natural selection happening and she saw herself as the executor of the oldest survival of the fittest balancing act.
At the same time, as someone who follows places like WSB seeing people getting in life-ruining leverage just for the adrenaline of it, or even worse, just for internet karma always made me think of that scammer's words: this is just natural selection doing it's thing as it has been for billions of years. And there's no third party scamming them. They know what they risk, and will do it anyway.
The world is full of physical and non physical dangers, we are naturally programmed to push for self preservation and yet there are people that willingly and consciously decide to put it all on risk, how can it be anything but natural selection doing it's thing?
Whats the difference between "idiots have to be scammed" vs "people who can't fend off a knife fighter while en route to the grocery store have to be stabbed"?
Some people are gullible, or trusting. This doesn't mean they don't have other gifts, or most of all good intentions. Applying an evolutionary pressure against people who can't fend off knife attackers is ultimately useless for human wellbeing
The real issue in the world isn't people not being smart enough to fend off attacks, but greed and ego
And besides, what is the root of such a 'idiot' person's deficiencies in the first place? Is it genetics? Or is it education, upbringing, early life traumas that stunt development?
Besides, the whole point of having fit genes in the first place is to bring about human happiness. If we use this to make people miserable it then shows that there is no substance to our perspective
> O CHILDREN OF MEN! Know ye not why We created you all from the same dust? That no one should exalt himself over the other. Ponder at all times in your hearts how ye were created. Since We have created you all from one same substance it is incumbent on you to be even as one soul, to walk with the same feet, eat with the same mouth and dwell in the same land, that from your inmost being, by your deeds and actions, the signs of oneness and the essence of detachment may be made manifest. Such is My counsel to you, O concourse of light! Heed ye this counsel that ye may obtain the fruit of holiness from the tree of wondrous glory.
There’s obviously a huge difference between a scam and a violent attack. The person being scammed doesn’t ever lose their agency and willingly participates. That’s very different from a knife attack, where the victim would leave at every moment if possible.
>Whats the difference between "idiots have to be scammed" vs "people who can't fend off a knife fighter while en route to the grocery store have to be stabbed"?
Lions, tigers, bears, etc., can really chow down on humans.
The issue with humans, though, is they gang up, real good. Eat one (that others care about), and twenty come after you with belt-fed machine guns.
Psycopaths may consider themselves to be predators, and "suckers," prey, but they tend to suffer the same fate as maneater lions, if they eat the wrong prey.
Shitty people always have ways to justify their behavior to themselves. One of the benefits of the market is it launders this justification so nobody has to feel guilty for the destruction it wreaks on human society.
Edit: Social Darwinism and justification of the private market economy are inextricably linked. I do think there is some merit to, well, divvying resources by merit, but our current world sees such an exacerbation of resource division the idea it reflects actual merit is absurd.
This is a position commonly referred to as "Social Darwinism." The same logic can get you to "drunk women out by themselves _have_ to be sexually assaulted" and so on. No, it's not OK to victimize people just because they're vulnerable. It's an absolutely odious caricature of moral reasoning.
I disagree with the comparison. A "drunk woman out by themselves" is, at the end of the day, just a person exercising their right to exist. A stock-market gambler, on the other hand, is literally betting on the bad decisions of whoever is on the other side of their trades. It's a predatory position to be in, and deserves a whole lot less sympathy.
Not at all. Money represents resources, and it’s objectively better for society for resources to be in the hands of people who are not fools, instead of those who are.
Does anyone have evidence that these so called “idiots” have fewer grandchildren as a result of being scammed? If not, this “natural selection” mechanism isn’t working
Sure there is. Retail investors are prey for more sophisticated investors. Getting people on WSB to make bad financial decisions is cheap and easy. I would be astonished if it isn't thoroughly astroturfed by hedge funds and other financial professionals.
I can think of one such example where the populace emphatically said retail investors were getting screwed, and AFAIK, conclusive proof was never found.
The claim was that Citadel was frontrunning Robinhood's retail investor order flow, which Citadel's market making arm paid for. The masses claimed that this was an extreme conflict of interest, and Citadel "must" be scalping the retail investors. However, the suspected reality is that Citadel was merely providing a market making service that (a) Robinhood couldn't do as well as a non-core activity and (b) for cheaper. Here's a Matt Levine overview [0] from 2021.
So all Americans in context of health insurance? All Italians in context of their byzantine bureaucracy and taxation system? All Europeans in context of social and retirement systems? All developed world in context of housing market? It turned into dog eat dog "eat the sucker" attitude. On top of the hierarchy we got really nasty predators, they look at YOU and see an idiot sucker.
Moreover, when this kind of attitude prevails, there are costs to the society at large. In a low-trust society, everyone needs to invest in walls around their house-compounds, and to avoid going out at night. You need to keep your wits about you to avoid scams and pickpockets -- mental energy that might otherwise go to other purposes. These small costs then compound across the whole of the society: There is less economic growth, there is less technological development. More individual wealth is required to maintain the same overall quality of life. Would you rather be a middle class person in 2024 or a medieval king? In those societies you're, at best, more like the medieval king. It's not as good.
The solution to these kinds of game theoretic issues is strong social norms, and punishment for violation. If this woman is scamming people, she needs to face consequences -- ideally within the official legal system, but perhaps also informally.
Most of the social protections and regulations underpinning life in the 'developed world' came about due to the horrors of the Great Depression and World War II. States knew that without a social safety net, availability of jobs and housing, national unity would be impossible to have, especially with an expansionist Soviet Union next door.
All of these lessons are being rapidly forgotten. Casino capitalism wrecked people's retirements in 2008. Almost 2 decades on, housing costs are out of control for millions of working people, because private equity can buy homes with cash at 0%, while families have to show all sorts of creditworthiness for the privilege of paying 6%.
On top of that, businesses that are already profitable (Google/FB, oil and gas, banks) are now charging even more because they can get away with it.
Take a wider view - the people with economic power are generally the people who use it for economically sensible things. Someone who spends irrationally is going to end up with no money. This is a similar process to natural selection - because the unviable strategies are removed, everything that is around is using a viable strategy. This woman was forcing people with unviable financial beliefs (that led to them being easily scammed) to give up their ability to exert economic pressure. In that sense, the same processes as natural selection are at play and we can call it the same thing.
Although I don't buy the logic in a lot of edge cases, it is somewhat necessary that these tactics are legal. Diverting resources to people who waste them is ruinous.
The purpose of sneering about "idiots" and inventing pseudoscientific gibberish about natural selection is to wash one's hands of moral responsibility for scamming naive young people, the elderly, or adults with psychiatric or cognitive disabilities. "It wasn't me robbing your college-age son out of a new car, that was just natural selection doing its thing! So long, losers!"
My mom was a very crappy person who strongly believed in the "sucker born every minute, separate a fool from his money" mantra. I think it's become a core American ideology.
One of the justifications that psycopaths and sociopaths use is exactly this - If their victims weren't so stupid, they wouldnt be victims. (Often mixed with the "if I didnt exploit them, someone else would"). Its an excuse to rationalise and try to justify their bad behaviour.
NATURAL selection is built to deal with NATURAL problems, and they move and change and evolve at the same speed, natual selection changes at the speed of genetic mutations of large populations, we didnt have smartphones even 1 generation ago - so how the hell is natural selection supposed to adapt to that?
When you have an electronic device thats beaming in risky behaviour at millisecond latency, what's the difference than having a big pile of cocaine in the kitchen and then blaming the addicted person saying "Its just natural selection, that enourmous pile of drugs thats just sitting there - you took it willingly", this is hyperbole but its illustrating my point - immediate availabity of dangerous risky addictive behaviour is a problem that will seduce a lot of people that otherwise would not have had the problem.
Im definitly someone in favor of personal responsibility but "ne quid nimis" and this must be balanced by a strong culture with good leadership to help the people who cant do it by willpower alone, so saying "Its just natural selection" is pure sociopathic / empathy-less answer and is unacceptable in a world where we should be helping and guiding each other and not saying "sounds like a you problem" while cranking up the exploitation dial.
>One of the justifications that psycopaths and sociopaths use is exactly this
>NATURAL selection is built to deal with NATURAL problems,
Human psychopaths essentially evolved (meaning they are generally hardwired) to exploit the niche of stupid/gullible people. You will see this in various species, i.e a parasite/host behavior. ( eg cookoo laying eggs in the nest of other birds).
No saying that it's a justification for psychopathy, but just stating the way things are.
I make enough trading to live off of. Sure, I lost small amounts of money for about 15 years to get good enough at it to do well the last 4 years, but now I spend a lot of time looking at the market because it's basically my job. If I had a real job, I'd spend all my time peeking at the market, and probably make less money, lol.
I'd say it's a great job for generalist news junkies. Also, now with AI you can have it grind through hundreds of pages of stuff. It's like having your own hedge fund research department. Getting over the psychological difficulties to becoming a good trader and unlearning bad conventional thinking takes a while though. It's why good traders are such non-conformists. They have trained themselves to not trust crowds and instead determine the truth themselves in controversial matters and then ride the crowd as it slowly realizes things.
Lots of luck involved, even if someone think skill was involved. You will see many hedge fund have down years and go bankrupt, all of these hedge funds have “skill” like every one else
There’s something to be said about our economy that doesn’t seem to value hard work and long term planning anymore for the prospects of a middle class life. It’s not enough to study hard, work hard, climb the ranks of a company, etc. Those days are over. For most people, buying a house and raising a family (normal, healthy aspirations) are out of reach.
We live in a ruthlessly “meritocratic” society. Not that we have a meritocracy but we very much value the idea of merit earning wealth. But the corollary to saying that people with merit will do well is that people who aren’t doing well must not have merit. In other words they are useless.
For a person (especially young men) without the luck or credentials to be considered to have “merit” their only chance to make it is to bet it all on black. I would suggest that’s not a very healthy or sustainable way forward.
Gambling addiction is so unrelateable to me. Likely real drugs sure, obsessive gaming, done that too. I think I'm to anxious to enjoy gambling with like that or something.
Likewise! I can understand drugs and such… But gambling? At least with drugs you have a guaranteed reward. You purchase heroin and you use it, you’re high. Task accomplished gambling it like “here’s money so I might possibly get high if I’m lucky.”
At some point the US will have to come to terms that the insane libertarianism that it shows to individuals is not a recipe for them living a good or meaningful life. Modern life makes it extremely easy for men to ruin their lives, with gambling, drugs, alcohol, screen addiction etc. We know what a good life looks like, we lack the will of forcing people who make destructive decisions into living the good life. Until that is done, things will keep getting worse.
I don’t think this is the right analysis. One should generally expect a positive return over time from investing in equities: you are giving up money now and taking on risk, and you are compensated for it by the return on investment. The word ‘speculating’ is generally referring to a different kind of activity from the kind of investing a typical person gets through paying into a pension. I don’t want to make claims about what typical people are doing with brokerage accounts, and the structure of brokerages seems to have changed enough that it’s perhaps harder to describe long term trends or the lives of ‘typical’ customers.
Fair point. There’s a real difference in attitude between speculation and saving. Most people buy stocks to save for retirement, not to speculate that they’ll have enough money for retirement.
But most people aren’t investors, either. Typical people buy stock for their returns, not for their productive capacity. My point is that’s speculation.
Most people have a speculator’s mindset. They would be happy to make a windfall on the market. For example, who wouldn’t be happy to own a plot in downtown Detroit before an economic boom raised land prices? Or stock in a startup before an established company announced they would acquire it?
Although someone who puts money in the stock market for retirement may intend to save money, since a 401k seems like just any another asset, but it’s quite different from other assets: Bank accounts fund lending to companies for productive investments. Homes provide a residence. Bonds provide money to countries and companies for investment. But when individuals put money in the stock market, it’s because they hope the asset will appreciate.
That’s because that’s all we can do. Buffet is an actual investor. His stock position allows him to remake a company if necessary. My stock position might buy some chickie bugs at Wendy’s. I have no direct control over any company I “own” and my voting position and the position of all retail investors is functionally nil.
not a lawyer here but I suspect that exercising rights as a shareholder takes some legal education and some networking.. you are right that the DEFAULT stance is what is presented.. but somehow I dont think this the whole possible story in 2024
Even worse is the 'air drop' craze of the crypto world. I also think the people that invested (and lost) their money in HAWK coin knew what they were doing.
They wanted to pump and dump the coin and couldn't get out fast enough. It's just another way to gamble.
Dunning Kruger IMO makes it quite likely that any substantial investment be a bit more like gambling than it ideally should be, as the difference really only exists in the amount of knowledge one has in the industry one invests in.
On the other hand, most financial advice also states that one should not keep more than X months worth of expenses in cash, otherwise one is still losing money on inflation and the likes.
EDIT: Then again, if you are staring at the tickers all day, that might still be a problem.
It may turn out that in the “next epoch,” our stock market will be understood as our civilization's greatest work of art - our greatest cathedral to capitalism.
The real elephant in the room is sports betting. Sports has mainstream appeal and accessibility that stocks will never have (primarily white collar with good jobs).
Every libertarian theory about legalizing gambling has been wrong. Marketing and ease of access increase use. It’s making sports worse and hurting young men.
Yes, that's ADHD, and I can tell you that playing the stock market for income will lay bare every single thing that is wrong with you. Becoming a good trader turns into just becoming a better person, adopting better coping mechanisms and developing extreme discipline.
And that doesn't happen in just a year or two. I recommend people to start off paper trading for years before putting down any real money.
On HN a post only counts as a dupe if it got significant attention, which that one didn't (only 3 points and 2 comments - but we'll merge the comments hither)
When an article hasn't had significant attention yet, we let reposts through (after 8 hours) - this is on purpose, to give good articles multiple chances at getting attention.
Of course that leaves the submitters in a bit of a lottery situation, but it at least evens out in the long run if you keep submitting good articles!
Understood, thanks dang! I think sometimes I just get annoyed because I see something I posted earlier getting reposted. I’ll try not to let it get to me going forward lol.
There's a paper I saw a while ago that uses LSTM for some kind of technical analysis trading, and the portfolio grew from 115k to 155k in a year, but also consistently
Seems like there's clear patterns to the market. If only these apps would teach people these patterns and trading techniques in depth rather than just letting them trade
There's a paper I saw a while ago that uses patterns for some kind of roulette strategy, and the bankroll grew from 115k to 155k in a year, but also consistently.
Seems like there's clear patterns to how roulette tables operate. If only casinos would teach people these patterns and strategies in depth rather than just letting them play.
This title is stupid. Comparisons to crack cocaine should have stopped in the 90's or early 00's at the latest. They're never made by people who have the slightest idea about what idea crack was, and whoever wrote that is extremely out of touch.
About crack: The public discourse was racist, the CIA had a lot to do with creating the problem, and in general it's no worse than the cocaine my fellow white people seem to think is so much cooler.
By someone who tried both cocaine (snorted) and crack (smoked), the craving is much stronger with crack. That's because it is much faster acting, it also wears off faster, and he said that part of him was ready to get violent for an other dose as it happened. Other than that, the effect was similar, it is the same molecule after all.
It is common to smoked drugs in general. For what I know, smoking is the fastest route of administration. That instant gratification makes it more addictive than slower routes of administration, like snorting in this case.
It doesn't mean the laws weren't racist, but crack cocaine is more addictive.
It is worse than powder cocaine though, just as meth is worse than an extended release Adderall despite both being amphetamine variants. I believe meth (a "white people drug") carries harsher penalties than other forms of amphetamine?
I know what kind of havok a gambling addiction can cause, and it's no joke. It's powerful enough (for some people, at least) that a comparison to addictive drugs generally is apt, yet the traps are everywhere and usually legal. Exploiting the psychological weakness that underpins gambling addiction is something sought after and optimized for outside of overt gambling, like modern video game mechanics, social media, cryptocurrency, retail stock investment, and so on.
In reflecting on why it's so addictive, I've come to believe there's a sort of feeling of adventure in random outcomes --that people like the entropy as well as the wins.
That said, going back to what I said before, my issue with the title of the article is with invoking crack specifically as some especially scary super-addictive thing, which is an idea that was over-hyped at one time. They could have just said cocaine, or better yet, made a comparison to opiates, but they're playing to an old and incorrect bias.
If it didn't make a meaningful difference in the experience but only increased the legal penalties, there would be no good reason for dealers to prepare crack, yet they did.
Nothing about a the race of a cocaine addict compels that addict to prefer one form or the other.
The comparison is made as a metaphor for strong addiction exactly because of the old political connotation. Those don't just go away. There are almost certainly more addictive substances out there; that is completely irrelevant to how humans use language. I would argue, even the phrase "crack cocaine" has more sticking power because of the phonetics.
I had to google it, but I guess you're insinuating that I've done crack?
Fact is, it's smoked cocaine, and the level of scaremongering about it was pretty absurd compared to powder cocaine, amphetamine, or opiates, all arguably just as bad.
https://archive.ph/ObYDN
> They expect the problem to worsen. The stock market has climbed 23% this year...
The problem will resolve itself if (when?) the market crashes.
I remember the run up to the dot-com bust. I was too much of a bumpkin at the time to even know how I would trade stocks — but I listened to an acquaintance go on and on about how much he was making on the market.
At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
In time, especially after the next bubble in 2008 when I had become more savvy, I came to see this guy as having been in the market at a time when even a monkey throwing darts could look like Warren Buffet.
So too I think are many of today's investors. (I would include myself but perhaps not: I have been won over by Boglism, a balanced portfolio, infrequent trading, etc.)
The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life. Almost nobody who “saw the crash coming” in the case of the dotcom bubble, or covid, or the subprime crisis made any money, because almost nobody gets the timing or magnitude of the crash right. You can find YouTube channels that have been warning people that a crash is imminent for the last two years. If you had been out of the market for the last two years you would have missed historical gains, and for what? The magnitude of the crash you’re protecting yourself from would now have to be impractically huge for you to come out ahead.
Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
Agreed this sort of advice is standard - but many people don’t follow it because it’s boring.
One way to make this sort of advice “not boring” is to apply the advice to 90% of your net worth (or cash flow), but then give yourself permission to “gamble” with the other 10%.
For me, that has fulfilled my personal interest in playing around in the markets for fun while still building/growing a traditional “safe” portfolio at the same time.
7 replies →
I remember at one point a couple years ago, I saw a thread on the Bogleheads forum where people could basically call their shot on market crashes; they would post and timestamp when they exited the market and when they re-entered, so that people could go and calculate if the timing was correct or if they lost money by missing out on market growth.
I might not have the dates correct, but I remember the general strokes of one guy who decided in like 2017 or something that the market had topped out, the crash was coming any moment now, and he sold everything and called his shot. He missed out on three years of incredible gains, and then the market absolutely _crashed_ in early 2020. He got it right, by a very small amount; he had gotten more selling his positions than he would have gotten selling in march 2020. He buys back in at what ended up being the absolute nadir of the market in like april 2020 or something. The rare success story of timing the market, you love to see it.
And then a few days later, he decides that actually, no, the market still has more to drop, and he sells again. Oh well.
3 replies →
This is the reason dollar-cost-averaging works. You buy less (shares) when the market is high, and more when it is low, without thinking about it and without trying to "time" your transactions (which almost always fails unless you have inside info).
30 replies →
The risk of a crash is why you stay out of single stock concentration and why you avoid day trading. Its not an argument to stay out of the market.
What do you think is the root cause for this kind of thinking? It is hard-wired from childhood, or borne of (difficult) experiences?
This assumes that you are talking about the US stock market. Most other stock markets are far slower to recover from economic downturns and crises. Why? Their economies are less dynamic and their political leaders are more fearful of difficult (economic policy) changes.
Lastly: The Nikkei 225 (Japan's most important equity index) peaked in 1990, then took 30+ years to recover.
Also: Look at Mainland China since it was opened to (direct) foreign investment in the last 15 years. Overall: The Mainland China economy has grown a lot, but their stock market is a terrible place to invest.
1 reply →
I assume PP means they are staying out of leveraged bets and risky individual stocks.
Generally the saw it coming crowd is just sticking it in diversified index and bond funds and doing other things.
I just always buy and never sell until the leadership and the board of the company appear to be going full retard. And not in a good way like Netflix pivoting to streaming in 2006 but like HP in 2006. Haha.
2 replies →
The market is people making bets on bubbles and crashes. That's how we get prices.
At any point or during any stretch of time, one of these sides will be correct.
Your point is that patience and discipline, not panic or overconfidence, are the real superpowers in investing
The Gov't / Federal Reserve has made it clear they will not let the value of assets drop significantly ever again. The entire planet's capital is now betting on US equities going up and to right forever, and all levers will be used and invented wholesale from nothing to keep that going.
The federal reserve literally just got through a monetary tightening policy that paid zero regard to the stock market.
The fed will juice to keep employment up and tighten to keep inflation down. They will not support stocks at the expense of those mandates
5 replies →
At some point though something will happen such that they can’t keep their fist on the scale, and then the market can correct suddenly.
Unfortunately government intervention makes it even more unpredictable when that will be.
This implies that a sustained crash will only happen if/when these two institutions are no longer capable of supporting the market. In effect, it's a bet against the US, which so far has been a losing one.
There's more to assets than US equities, the Fed would be far more concerned with serious weakness in the Treasury market, and Treasuries often move inverse of US equities.
I wonder if this sets up a moral hazard that only exacerbates a possibly coming crash. People assume the Fed will prevent assets from dropping, which makes them bid up asset prices to even higher levels that even the Fed is incapable of maintaining.
Yea, except the inflation we encountered in the last 3 years were directly from trying to keep asset values from dropping. They are at their ropes end. There really isn't that much room between mass inflation vs. the rich keeping their numbers infinity growing.
2 replies →
Certainly hope they’ll keep going to the right…
> At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.
You lucked out by mistakingly believing he was intelligent. The classic scenario is when your neighbor is obviously an idiot, making tremendous amounts of money in the market, and you have to explain to your spouse why you can't/won't emulate them. That's when even bright, (normally) level-headed people start piling in before the bubble bursts.
Indeed, most frustrating is when someone (stupid) is proven right, even though they used completely wrong reasoning (in spirit of Gettier problem).
1 reply →
> The problem will resolve itself if (when?) the market crashes.
Someone said something like, Everyone thinks they're a genius, when the market only goes up.
Although, one thing different now is the heavy throughout-the-day manipulation of retail investors, effectively making strong social groups and identities around it.
That wasn't a thing when, say, ETrade started, and lots of people dabbled, and found it was hard to lose money, just trading around different companies, with little understanding of how things even supposedly work, much less how things actually worked.
Today, from what I occasionally glimpse, you've got all these supposed skills you're applying as a retail investor/sheep/pawn (including various degrees of snake oil, or thinking you're going to be one of the smarter people on a pump/dump scheme that leaves others holding the bag), and constant social groups where people even self-deprecatingly celebrate huge day-trading losses. Like a wholesome support group that actively encourages you to stick with the bad habit, rather than encourages you to stay sober.
So maybe, when the next big culling comes, you'll have lots of people who can somehow still get margin accounts, and will say, "Blood in the streets, and I'm missing 3 limbs, but, hey, stocks are on sale!" And a thundering chorus of other addicts, and their manipulators, encouraging them.
(Disclosures: S&P 500 ETF with low expense ratio in tax-advantaged, plus an emergency fund that goes nowhere near the market. :)
I've yet to really land on my opinion of the idea of a pending market crash with how much money printing has gone on.
All the standard indicators I look at really line up with the idea that a crash should be coming, or should already have happened. Companies aren't valued based on the fundamentals anymore, for example, and yet here we are.
Its starting to feel more like the perpetually increasing market, despite the fundamentals, is a sign of how weak printing and inflation is making the dollar. Stocks can go up when the companies are worth more (ideally because they are producing more), but prices can also go up because the currency used to value the stocks is taking a serious hit.
The worst is the crypto gamblers thinking they are "investing". If they make even the smallest profit you'll never hear the end of it.
>> They expect the problem to worsen. The stock market has climbed 23% this year... > >The problem will resolve itself if (when?) the market crashes.
This sounds like a terrible way to "solve" the problem
This is easy to say but the reality is being a monkey and throwing money in the market over the last 15 years would have made you f u money. Yet most people never did it. So who is the genius: the guy who remains on the sidelines and eventually is proved right or the guy who remained in the market and did face a brutal correction. One thing I've learned about myself is that I'll never be the guy on the right end of that mid curve meme so I might as well lean in on being on the left.
I've worked as a software engineer for various investment banks. The best quote and investment advice I've heard on those engagements is "Only monkey's pick bottoms"
Middle of the road, risk managed funds are our best chance of financial success, not individually predicting the market dynamics.
A market crash won’t be a silver bullet. I’ve known several gambling addicts and that’s not how addiction works. They don’t just stop because they lose a bunch of money. They always hold out hope they’ll be able to win everything back “next time”.
The SPY and QQQ charts zoomed out are starting to look like the biggest parabola of all time in markets. 1999 is just a blip on this monster.
Seeing all kinds of warning signs from family members who never traded or got into crypto until just this past 6 months.
Change the chart to logarithmic scaling. You need to use log scaling for long term stock market charts
The dotcom crash was huge in terms of the percentage drop
Nasdaq crashed 84%.
https://www.tradingview.com/x/xm2zypvg/
> Seeing all kinds of warning signs from family members who never traded or got into crypto until just this past 6 months.
That's just jealousy, Those who sit on the sidelines complain the most. Like I said in my previous post if you didn't see it. I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%. Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
3 replies →
Personally I got into this when the stock market crashed in 2020 and I made shit loads. There are big winners during crashes too, some of the biggest wins.
Yeah currently young adults are screwed when it comes to gambling addiction.
They were children in the heyday of abusive loot boxes and cs go gambling.
Turned 18 right around when sports betting apps became legal.
In their early 20s crypto exploded.
Now, apps like yotta prey on them. Stock trading apps make it easy to dump your money on tsla.
Is going to be rough
I have to disagree with you. Comparing long-term, passive investors to short-term speculators seems unfair and simplistic to me.
I thought we were talking exclusively about short-term speculators.
1 reply →
Illusion of genius
[dead]
I see it as that the barrier to entry for making money has never been lower. Right now, it’s one of the best times in history for anyone to start earning, not just the Wall Street elites. Thanks to AI tools and online platforms, it’s easier than ever. Every week, new tools are being launched, some even claiming returns as high as 400%.
Take the NexusTrade guy on Reddit as an example. He created his own investment tool and is now in conversations with Wall Street professionals.
It’s so accessible now that with just $100, you could invest in a stock like NVIDIA, double your money in a week, then reinvest across multiple stocks and multiply it again. Suddenly, $100 turns into $2,500 in no time.
I get your point about everyone making money, but why is that a bad thing? Isn’t it great that anyone can do it? These platforms are practically making money for you, whether you’re at work, at home, or even asleep. Like someone once said, “If you can’t make money while you sleep, you’ll work until you die.”
It’s never been easier to earn significant amounts of money, and it doesn’t look like this trend is slowing down anytime soon.
You could also have invested in SMCI at its high of $113. it's now down at $34.
Many criticize the retail investor for treating the stock market like gambling, but I think it really does resemble gambling more than investing these days.
How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their market caps continue to climb?
“Value investing” is dead for most, picking a company that you believe will generate solid long-term revenue is no longer interesting. You need to figure out what is going to 10x tomorrow.
There are things that we could do to slow down the public equity markets and re-establish the relationship between stock price and business fundamentals, but that’s not what almost anyone wants.
> “Value investing” is dead for most, picking a company that you believe will generate solid long-term revenue is no longer interesting.
In that sense, value investing has always been dead—most people were never interested in that. That's why value investing worked.
I think the bigger problem is having a rational basis for choosing a company and believing in its revenue prospects. It's probably gotten harder now that companies much more commonly reinvest their profits in the company or into stock buybacks, rather than paying a dividend, for tax reasons. (Modulo the tax effects, paying a dividend vs letting the stock appreciate should be a wash, but it's harder to evaluate the current fair value of a stock when your evaluation is based on the expectation of that fair value changing over time.)
Technically, value investing still work.
The key tenant of value investing is that there exist companies which based on their financial metrics are fundamentally under valued by the market (in opposition to what market price efficiency predicts).
From there, an insane market should provide you with even more opportunities to value invest.
5 replies →
We'll look back and see with clear eyes the transient phenomena that made strange and magical meme stocks and unicorns what they all were. Somewhere in the last 50 years stock investing turned from green-eye-shade economic analysis to a social phenomena that couldn't be bothered with dividends and profits.
I go to the supermarket and milk is on sale, I buy two. But momo clowns go and see milk is on sale and they try to sell the milk they have on hand back to the store. They don't act like the products they buy have fundamental value, because in many cases that value was inflated wildly beyond justification long before the trader ever got started.
I mean, it’s widely understood. There was deregulation in the ‘80s that kicked off the financialization trend (along with private industry customs being invented like Jack Welch’s whole chasing shareholder value uber alles shtick), and then the interest rates cuts in the wake of the 2008 recession (and then again during the pandemic) superheated this kind of behavior.
The thing is, picking a company that actually will generate solid long-term revenue isn't really a thing. You can try, but your success rate, if you're good at it, is going to be about equal to the success rate of companies. There are dozens of studies of professional traders showing this. If you're bad at it, you'll buy into the companies that are pure hype and do worse. And... you probably aren't good at it. Most people aren't.
The people who beat the market consistently have information you don't. Instances of people who call major trends before they happen and get rich are likely survivor bias and not genius.
things haven't changed since vanguard started index funds 5 decades ago. buying and holding diversified assets prevents you from thinking "You need to figure out what is going to 10x tomorrow."
I agree.
I think the reality is the "don't try to be smart, do these low-risk things because statistically you're too stupid to beat the market" has logic to it, and stats to back it up. But the unspoken part is, "let the rich do that stuff, and their wealth advisors and folks on the golf courses".
So there's an elitist aspect to telling people to back off. We all know people who made a killing on individual stocks, either because they bought them or they worked at a company that issued them.
It's not really elitist. Picking individual stocks is essentially saying "I have brand new insight that nobody else has, and I'm going to earn profit by incorporating that knowledge into prices and be rewarded forgetting it right". This is clearly a very specialized activity, you shouldn't expect to be able to bring brand new, accurate insight, and out predict everyone else in the world, without a deep understanding of economics, finance, and expertise in the specific industry and the company you're trading in. It's no more elitist to say "most people should just buy index funds" than it is to say "most people should just get root canals done by dentists rather than doing it themselves".
9 replies →
So... literally survivorship bias, and insider trading. Great, neither of those make me think I'm arrogant or smart enough to day trade. Nothing about this is elitist.
I've made a killing on 'X' by getting in early and holding over the years. Not one single person in my life knows the details because I want zero responsibility for them getting wrapped up in it, and I know how hard it is for people to be patient and hold when they're chasing a high, I mean profits.
Most of those rich people with their wealth advisors are also underperforming: https://stockanalysis.com/article/can-you-beat-the-market/
I know people who won big on the ponies or shitcoins, but that doesn't make those smart places to put my money.
Aren't index funds more modest in gains but more safe?
Depends on the index fund. There are triple leveraged funds that can go to zero in a crash
1 reply →
Yes
Many things look like gambling on short time frames. Investing requires taking a long view that averages out the short-term noise like meme stocks.
It does require patience, which is admittedly harder to come by when you’re young.
The best we can do is navigate this landscape with open eyes
I lost my life savings chasing the dopamine hit and can relate to this. I'm in my mid 30s and suffering from career burnout. I know I can't afford a home when I can barely work full-time so I figured I'd trade. I was up, and up and up!
Then I was down, then up, then down.
One morning I woke up and I was so down, I sold out of fear.
Now I'm left with so little I might as well be starting from scratch.
This feels like gambling and here I thought I was smarter than those people that lost in casinos.
My experience, with a wide variety of generally older friends & associates & such -
If they're talking about an occasional visit to the casino, people will be up front about the fact that they walked into the place with $X in their pocket, and walked out with $Y. Almost always, $X > $Y.
If they're talking about stocks they've bought, people will be incredibly selective, and describe only some of their greatest successes. They could lose money in a rising market, and you'd have to carefully question them to even realize that fact.
Which is ridiculous because while casinos are engineered to ensure $x > $y over time, economies are existentially dependent on the reverse being true over time and across a broad enough portfolio.
Folks you can just buy the S&P 500 and wait. It really is that simple. Money will go down sometimes, up sometimes, down some more, but in the long run it will almost certainly go up. And if it doesn't, the world is crumbling anyway so who cares?
3 replies →
Heh, I'm kind of the opposite. I like talking about the time I gambled with a couple thousand on options and after a rollercoaster experience, lost it.
But my index funds are not an interesting topic, imo.
Because the way you did it, it is gambling.
It’s easy to convince ourselves we’re “investing” and not gambling
At this point I’m just watching a slightly younger cohort of men repeat all of my worst digital addiction mistakes like getting inserted into the online video game -> toxic online behavior pipeline (or worse, fascism), ideologies (Musk), crypto and options gambling (thanks Reddit a la 2013 for all of the crypto communities and WSB) too much computer (ouch, my neck, arms and back.)
I’m not doing particularly well, especially mentally, despite having tons of opportunity and successes. Worried about the younger cohorts, but I guess that is a tale as old as time.
I feel like the patterns are more or less the same but the cycles are getting shorter and more pronounced.
I met the son of a family friend today, he's 13, already has an opinion about the Israel/Palestine war and spent $500 in roblox so far, they're not wealthy at all. Back in my days I was stuck in the free to play parts of mmorpgs (or had to beg for months for a $5 monthly membership), playing tf2 (free) and had 0 political ideas or even knew people who cared about politics
It really is not beyond the reach of a motivated and curious 13 year old to have an informed opinion on (geo)politics.
3 replies →
When I was 13 I had a paper route and mowed lawns, and with those earnings I spent about $75 per month on video games and comic books, easily exceeding $500 over a year.
5 replies →
It's normal for 13 year olds to have strong opinions on such topics - they have plenty of time to refine them or even change their mind.
I would be more worried about those who by this age didn't develop any interest in geopolitics - it affects them all the same but they typically don't understand why and pick whatever source tells a more compelling story.
11 replies →
$500 in Roblox? that's a lot of money for a 13 year old and that money could likely be spent elsewhere... As far as the opinion about Israel/Palestine it's likely that opinion is inherited from family or cohort and it's not fully their own.
4 replies →
If you don't have decades of built up propaganda it's pretty easy to see that Israel is the bad guy. The condescending "it's complicated" line is part of the propaganda telling you that you're not allowed to come to the obvious conclusion for yourself. My 10 year has figured out that Russia is the bad guy in Ukraine and that Israel is the bad guy in Gaza.
37 replies →
online games aren’t the problem imo, it’s disposable identities and ~zero repercussions for bad actors.
The remedy is far worse than the problem
14 replies →
Are they also drinking tons of soda? I can’t believe how much I used to drink. I don’t touch any drink with sugar (other than lactose/latte) nowadays. It’s so disgusting, don’t know how I ever did it in the first place.
God my teeth wish i had just stopped drinking soda a decade ago. It wasnt even that hard to kick
4 replies →
Broad brushstrokes incoming and pure speculation but I wrote it out anyway…
Today’s youth are more proactive with their identities these days than we were. We were and remain reactive with our identities. That preference influences what triggers the dopamine hits needed for life.
The drugs of a reactive identity culture are sugar, alcohol, narcotics, work, anything that’s a trope in movies made by boomers. These drugs have consequences that shape the user’s identity. For example: weight gain or burnout.
But the drugs of a proactive identity culture are those that drive the person’s perception of their identity. The live ahead of the consequences. Things like digital social networks, status symbols like shoes, colleges, or jobs, and anything that drives success in those status symbols. Example: Adderall helps the user study, which helps the user get better grades, which opens the door to a better college, which allows the user to flaunt that college association as part of their identity. That doesn’t mean there aren’t consequences to those drugs but those consequences aren’t tropes of modern life just yet because we’re still normalizing their outcomes.
All of this to say: sodas aren’t their thing because soda is “unhealthy” and that drags on their identity.
8 replies →
Wsb was 2013??
It existed at least: https://web.archive.org/web/20121218025312/http://www.reddit...
I remember the “community” having its own well-defined memes and culture by at least 2016
People want a chance to get rich. They also want excitement.
Doesn't that say more about our jobs that are a) dead-end for most b) financially limiting, with a salary that goes up slowly, if at all, unless you find a new job
People want the chance to win, and some meaning, and some daily purpose.
No one cares anymore about the stats of "stock pickers" "day traders" and other arguments for DCAing into index funds and not touching it until you're 65. A 60/40 portfolio. Don't time the market. Efficient market hypothesis. We live in a new world now, and people are willing to gamble. Sentiment is obvious for the average person to get a sense, and they trade on sentiment.
Maybe give people new meaning somehow, or a chance to make unscheduled money other than the slow-as-molasses salary increases.
You describe the psychological motivations for gambling.
The psychological motivation for taking risk.
I don't necessarily call all risky stock activity gambling. At the risk of splitting hairs, it's a little different to buy Tesla stock because of, for the sake of argument, let's say a really bad reason (CEO smart, car go fast), i.e. uninformed, than it is to bet on a number on a roulette wheel.
I think we paint it as gambling because gambling has an aura of naughty judgment about it, as in, "Oh, you're just gambling because you made an uninformed stock purchase." I'd prefer the term speculating or risky stock picking. Gambling, which is banned in many places and is against the law in religious texts, has a taboo because it's addictive. I daresay only a minority of stock trading bros are addicted in that way.
Lot of people are becoming more knowledgable and skillful. But purpose is the missing ingredient.
Without purpose or a motivator in life people end up getting trapped in mindless rituals. It keeps the reward circuitry in the brain from decaying.
I once asked my wife, "what is my purpose in life?", and she has been cracking dolphin jokes at my expense ever since.
That's good, at least. She could have said "you pass butter".
Is that a Hitchhikers Guide to the Galaxy reference?
4 replies →
Well, you have a choice there. Ask others, and get dolphins; or follow your heart.
This is such an odd answer. "People are bored so they become degens", is ... not the full picture, I don't think.
But who needs hobbies, or friendship, or nature, when you have TikTok!
Child rearing is a possible solution—it is our evolutionary “purpose” to reproduce, after all, and most people in the developed world today aren’t doing it.
A bit off-topic, but it’s interesting how this became the de-facto answer to any question related to “meaning of life” in the last 2-3 years in HN/tech circles. I’m not saying you’re wrong, but it’s a bit weird. Like I’m sure everyone knows that? If a person isn’t having a child in their 30s, they either can’t because of multitude of different reasons, or they decided they don’t want to.
Disclaimer: I’m as pro-kid as you can get, just haven’t met a partner who would be on the same page as me yet.
When I was talking about it with my friends, our guess is, people with kids are getting worried. If others aren’t having kids, then their kids might suffer big time in a long run, thus the renewed pressure to keep suggesting the idea to others. Obviously this doesn’t relate to you, just weird how it started in the last few years.
30 replies →
> Child rearing
For what purpose?
> it is our evolutionary “purpose” to reproduce
Yes evolution selects for having children survive to reproduce, but that’s not a purpose, that’s just “that which continues, continues”.
> and most people in the developed world today aren’t doing it.
Plenty of species have evolved such that when they sufficiently saturafe their environment and resource carrying capacity, reproduction rates drop through behavior changes based on various signals.
>Child rearing is a possible solution—it is our evolutionary “purpose” to reproduce, after all, and most people in the developed world today aren’t doing it.
I doubt it, that's because to most people it does not feel purposeful, it's a chore. Most people who say it's purposeful are generally the most vocal ones, and I suspect the minority.
14 replies →
The replies are bit harsh. It is a solution to meaningless of life. I am reminded constantly by some of my friends.
But it's also a problem for some. For example, it means moving out of expensive cities, it means worrying about making lots of money (if you live in the U.S.), it means child care is thousands a month, it means health care is thousands a month. It means you have to be responsible and not drink every day. It means potentially not sleeping for a year.
Personally, seeing the stress of my workmates, and how they became more dependent on their jobs, on the shit of the jobs, and how now they're more competitive on the job, and worried... I'd personally choose to write that off.
But I know people who found meaning through child-rearing, as you say!
>most people in the developed world today aren’t doing it.
Untrue: e.g., in the US, "Among women and men aged 40–49 in 2015–2019, 84.3% of women had given birth and 76.5% of men had fathered a child."
https://www.cdc.gov/nchs/data/nhsr/nhsr179.pdf
This is the best answer. From a strictly rational perspective, parenthood makes little sense. The negatives are obvious and intimidating, while the benefits (which are not rational but instinctual) are less clear. Happily, oxytocin is a helluva drug. It will rearrange your universe in the course of an hour, such that all of its substance revolves around a splotchy, squinty little ape.
I highly recommend it.
1 reply →
Doesn't this seem like a tautological purpose? Our purpose is to create a new generation of beings who question their own purpose?
2 replies →
A thought.
What if we have judged the healthiest of a society on the wrong metrics. And the right one is birth rate?
We might say things are bad for a society if it’s too dangerous or not enough food so the birth rate goes to near zero and as a result it dies.
How is a society that has people being too busy or occupied with other task that neglects reproducing a better society than the latter?
Obvious too much of a birth rate is bad, but too little could also be a sign of an unhealthy environment.
4 replies →
> jaco6 : Maybe the minority who want to reproduce will be paid to reproduce for everyone else in the future?
This latter comment of yours was down voted by idiots to the point where it's dead, so I could not respond to it directly.
Anyway, specifics aside, it is actually a good idea - for a variety of reasons.
2 replies →
If you have the math chops, you should really try to get into it just so you can realize you are not going to make a money making algorithm. I got knee deep into it out of boredom during Covid and was able to have the "aha" moment where you realize the best you can do is buy index funds or just long hold companies you believe in that are in your area of expertise.
Extremely solid advice. As someone who has worked at a trading company that makes the big bucks, I can say you (as a single investor) will never consistently beat the market on any remotely interesting instrument. The sheer resources the institutional traders put in is mind boggling. You must understand that you truly are gambling in the face of such a sophisticated opponent. The quicker you understand, the better (hopefully without losing your life savings first). And don't even think about derivatives, you will get eaten up and spat out like you can't imagine.
Isn't that how RenTech got started?
From what I understand, that fund still does huge gains, and can't get too big.
RenTech was founded by legit signals processing guys who cut their teeth breaking codes for the NSA and basically invented ML for the stock market. They also built the best dataset in the world (at the time) for stock info as a competitive advantage. There's no real way to duplicate what they did today when everyone else is already doing quant trades to take advantage of suckers.
Note: There's a great podcast on RenTech by Acquired: https://www.acquired.fm/episodes/renaissance-technologies
1 reply →
There's a lot of firms like that.
2 replies →
If the gains are huge, it's either temporary luck or they're cheating. You cannot have long term high alpha without either. If you meet a person who can constantly flip a coin heads side up, ask them to keep going and they'll either fail or you'll find the coin is rigged.
6 replies →
I tried for a long time with stocks, then I tried stock options. I eventually moved off to index and treasury futures. No money to be made in stocks, shitty leverage, high fees, LOUSY TAX TREATMENT and to complicate matters further shorting can be problematic. Also no "real" market is open 24h so you really just get to trade open-to-close standard hours. Stocks just have too many things going against you to make any money and thats before you figure your broker is front running you in the first place.
My basic strategy is that the signal/news/data contains no real information beyond whether or not people are buying or selling. When they stop selling I start buying and vice versa. Use your data skills to identify "things that work with regularity" and "things that rarely ever work" while at the same time understanding "literally any strategy works SOMETIMES".
Develop a roughly asymmetric strategy where your average gain is greater than your average loss per trade. The biggest thing you need is to pick some BIG WIN trades and ride them for a large profit. A small percentage of big wins pay for the losers and make the whole thing profitable. Remember that you "Make more money" by trading larger quantities, not by seeking larger moves. You don't "make money" so much as you harvest what the market gives you and if its not giving you close the trade. Your chosen trading system should reflect this.
Size your trades such that if you're betting N shares with $Y dollars now and you take a loss, you're coming back to the table with at least N shares and $Y dollars. Never loose $100 and find yourself in the position of recovering that loss with only $50 to play with. Read about "money management" in gambling for some ideas heres.
Don't be afraid of the short side either as you will make about half your money there. Don't be afraid to bet agains the trend and "call bullshit" on a move - your system should be designed to detect the success rates of these calls and should be looking for those situations.
For me its about using data to make bets where, in the event I win, I win pretty big and in the event I lose, I lose minimally.
USE BRACKET ORDERS FOR ALL POSITIONS OR PERISH. AUTOMATE YOUR STRATEGY OR PERISH. ALWAYS TAKE YOUR TRADES OR PERISH.
Making profitable trades here and there is EASY - keeping the money you made on those is the hard part.
EDIT: If you're concerned about "slippage" you have a bad strategy. If the strategy can be undone by a .75pt slip then you need to consider something else.
EDIT: Don't be seduced by the High Frequency Trading bullshit. You don't have the infrastructure for this and the fastest safest Rust code you can write is still connected to some slow retail trading infra here. Plenty of money to be made in Low Freq mode. 20 trades a month per instrument is a lot of trades a month!
> No money to be made in stocks, shitty leverage, high fees, LOUSY TAX TREATMENT and to complicate matters further shorting can be problematic.
Historic evidence does not support this statement in the strong sense. Whether it is true, in a weak sense, into the future, is debatable.
1 reply →
What’s old is new again.
If you worked in a tech office in the late 90’s, every other guy had Ameritrade or similar up in a window. It was the gaming/porn you could get away with at work.
Dot com roasted them all.
Wasn't it still $10/trade back then? That adds user friction, which discourages the gambling aspect much more than "free" trades provided by Robinhood (free as in they'll sell your order flow data to third parties).
Robinhood is an ironic name for the app that enables retail investors get cleaned out by the rich at scale.
I pay my brokerage about that, which is fine, as it works out as less than 0.1% of my average deal - and it’s usually at least five years between a buy and a sell.
When people complain about brokerage fees, or are pleased that their brokerage charge no fees, it usually means they will be losing their shirt at some point.
Volatility trading is for masochists on actual cocaine, and suckers.
1 reply →
As did 2008. A bull market is a hell of a drug, as it were. And yes, we're probably headed for another big correction in the near to medium term future.
There are structural changes that make it much easier to convert trading into gambling. Feeless trades and easy access to margin accounts and more advanced vehicles means that you can easily make dozens of high risk trades in a single day.
> If you worked in a tech office
Office? ;)
I was trading stocks in between my CS classes in the late 90s lol
Same. Good times.-
I wonder if this could, in a manner of speaking, be a "rational" choice that indicates a breakdown in society. That is to say, perhaps some of what we are seeing is that younger people have concluded that the only way to live a decent life in America is to become rich and becoming rich mostly comes down to luck. If gambling is the only way to get a decent life then they may as well gamble. If they lose, then they were already going to have a bad life anyways.
Some guy wrote a book recently and claimed that about 10% of workforce-eligible men are long term out of the workforce, due to some type of disability. Also 50% either aren't engaged at work or don't really do anything essential, meaning their job could disappear and it wouldn't be a huge impact.
https://www.richmondfed.org/publications/research/econ_focus...
https://www.frbsf.org/research-and-insights/publications/eco...
I think this is and overlooked factor. Though living standards have not fallen, the perceived risk of it falling is probably at an all time high. We got rid of pretty much all cultural safety nets, and now people are desperate to replace the lost security.
The regular 9-to-5 is seen as a last resort now—it’s almost like you’ve failed if you don’t have a side hustle. That’s the vibe. With AI and machine learning platforms making waves, especially for traders, the game has completely changed. The barrier to entry? Practically gone. These platforms have made it so easy to get started that anyone with a bit of curiosity can jump in.
It’s not the exclusive playground of the Wall Street elite anymore. What used to be this tightly guarded world of algorithms and insider knowledge is now available to anyone willing to dive in. People are out here making bank, and they’re getting good at it. Trading isn’t just something “some people” do—it’s turning into a thriving industry where regular folks are learning the ropes and doing well for themselves.
This whole shift has made the traditional career path feel outdated. Why settle for clocking in and out when you can leverage tools and tech to build something for yourself? The idea of just sticking to the 9-to-5 feels like giving up when the opportunities to create and grow are right there, waiting.
It's funny because 9-5 is still a great way to actually enrich yourself. The best way to grow your wealth is to increase your income, and a salary+benefits is the juiciest way to do that.
Sadly, I've seen many male friends of mine obsess with the stock market but not have anything going career-wise. They just hope they hit big and "make it." Better to just stack salary for years the boring way and save yourself the time it takes to micromanage investments.
9-5 is definitely not the way to enrich yourself, that's an unfortunate message. Have you noticed how housing costs have consistently beat inflation for decades? At least if you live in a VHCOL area. It's easy - check the FRED report on the median salary and compare that with a graph showing the median housing price.
OK so the most important thing is out of reach with 9-5, independence from rent. The next set of factors like health care, and if you have a kid child care and health care, are also up compared to wages (9-5 wages).
That leaves just food and entertainment. I suppose you could live with roommates, eat frugally and not go out. And then maybe the 9-5 is the way to become rich.
For most of us the way to build wealth is through asset appreciation - housing , stocks. The 9-5 is the 'not so passive income' that you use day-to-day while you either SAVE up for the 'assets' (if you're lucky), or you gamble / inherit / get lucky with these assets.
8 replies →
Also, the second best way to enrich yourself in America is probably buying a home. But you need a down payment and the ability to afford it over the 30y mortgage.
Gambling on stocks may give you a windfall that amounts to a down payment, but good luck convincing the bank you can pay that new mortgage for 30y off your stock market wizardry.
> Trading isn’t just something “some people” do—it’s turning into a thriving industry where regular folks are learning the ropes and doing well for themselves.
Said every forex / options / crypto course seller ever.
Anybody remember the "Day Trade your way out of Debt" late night infomercials in the '90s?
> Said every forex / options / crypto course seller ever.
And they're correct on this. The only catch is that you don't need to buy their courses to know it.
Jeez, I've heard all this and much about online trading portals 2 decades ago. They weren't incorrect, anybody could trade, even alghoritmically. AI isnt bringing anything added for regular users that others dont have, so nothing.
You make your own priorities and risks, as do we. Your comment anyway reads like some cheap marketing for clueless folks on the back of a bus just before bubble bursts.
Anyone selling the retail investor an "edge" via ML platforms or AI is selling snake oil. Sure the barrier to entry is low, but profits are never guaranteed.
Blocked for AI reply
The other day at the store, in my smaaaall hometown, I overheard the cashier and an older man discuss crypto while I was waiting for my turn. They were discussing meme-coins they gambled on. Super weird to hear irl.
Sounds like shoeshine boy time.
Note this article isn't about investing, it's about gambling.
It doesn't mention Robinhood's role in promoting addictive gambling behaviors. How much has it changed since this 2020 article? https://www.nytimes.com/2020/07/08/technology/robinhood-risk...
> After funding his account with $15,000 in credit card advances
Wow. Stop right there.
Young people can take risks that seem crazy to us older folks, because they have way more time to recover.
If you leverage invest early in life, even if it completely wipes you out (once), you can leverage your way back into money.
5 replies →
The supposed "survey" or whatever the hell this is was taken from a bunch of amateur people who started trading out of boredom which depicts an entirely non-real picture of the people who have been doing this for a living since quite some time. Like with everything else, using your brain cells can quickly make you realize it's a lot more than "gambling"
> Like with everything else, using your brain cells can quickly make you realize it's a lot more than "gambling"
Which sounds similar to how gambling addicts report their thoughts on their addiction - that they are smart enough to learn poker, or they know enough basketball to be able to predict outcomes.
Like with everything else, some research and data interpretation shows that with the remarkable exception of two or three highly specialized companies that employ some of the best mathematicians alive, most active investors underperform.
This comment should not be greyed out. See the Buffett Bet [1] for the most famous example of this.
Warren Buffet bet a million against Ted Seides (head of Protege at the time) that a simple index fund investment would outperform any handpicked selection of hedge funds over a decade. And critically this bet was made in 2008 just before the market crashed! That's when hedge funds should disproportionately shine, as per their name, by hedging. In the end it wasn't even close.
[1] - https://www.investopedia.com/articles/investing/030916/buffe...
1 reply →
>Which sounds similar to how gambling addicts report their thoughts on their addiction - that they are smart enough to learn poker, or they know enough basketball to be able to predict outcomes.
Some people are smart enough to learn poker, and build careers out of them. And there are many books on poker. You picked a poor example.
3 replies →
> a bunch of amateur people who started trading out of boredom
Former options market maker. The industry was dead for a decade until the pandemic. It’s now more profitable than ever. Lots of negative-alpha orders that can be predictably sorted from the flow. Market makers are seeing casino-like margins on some subsets of flow; that signals a problem.
It's hilarious watching the r/Superstonks subreddit live in a pretend reality. Supposedly Citadel is their sworn enemy but they've spent the past 4 years purposely buying badly priced shares from them.
How do you educate someone so confidently and consistently wrong in their world? Someone who INSISTS that "No, this letter from BBBY that says that we are going to see massive share dilution when 500k new shares are printed and sold to pay down debts before the company is shut down, is a lie because they actually are going to magically transform into a new competitor against Amazon because Ryan Cohen (a man who was only part of BBBY for like a month) is going to be the new CEO and make us all rich"
When those shares dropped at an obviously stupid price with zero future value, they bought them by the hundreds and LITERALLY wrote "thank you for the tasty dip"
There are plenty of people who are trading with a strategy. There are also oodles of people who are engaging with trading in precisely the same way that somebody engages with sports betting. And various platforms are using similar marketing and ux strategies as betting platforms to encourage this.
Coincidentially today I've just finished reading: "The Little Book on Common Sense Investing" by John Bogle. What's described in the article is exactly the opposite of what people should be doing if interested in serious investing. The book mostly focus on index funds and I highly recommend its reading to anyone who wants to understand and embark on investing seriously. The book is short, extremely easy to read, full of examples, wise advices and quotes from remarkable people of the investment sector.
I’ll add it to my reading list, but I think a lot has changed in the world since this book was written.
What hasn't changed:
* US economy has been growing steadily, and will do so for the foreseeable future
* Index funds are still a great way to invest your money
And more importantly,
* Most people suck at picking stocks (including the average Joe, mutual fund managers, YouTube/TikTok influencers and "stock analysts"). It's better to just leave it to the market, aka SPY(VOO)/VTI etc., and have good sleep.
1 reply →
Online stock trading has gone from cheap to free, but that doesn't affect the worthiness of the book.
It’s a cheap way to purchase a diverse subset of the global economy. That’s as timeless as it gets.
After losing my first chunk of cash during 2000 .COM crash I became be quite contrarian. Thought real estate is way too high, thought the stock market is nuts, bitcoin is a scam. Turns out the big crash never happened and everything ket going up. Three years ago for some reason I jumped into the stock market, bought a house, bought some bitcoin. Turns out so far the gains have been life changing. If I ever get laid off,I may be able to just call it quits and retire.
I still think the whole thing doesn't make sense but it seems economic fundamentals don't work anymore. Everything is a bubble.
You went long on some fairly general assets. That's not gambling.
The problem with gamblers is (for example) making risky bets on margin and ending up losing massive amounts of money because a meme stock lost 5% of its value during a normal market fluctuation.
Same. Friends who just threw money at stuff are millionaires, and I'm... not. Hard to just put the money in and expect more back when it took so much hard work to get in the first place.
If you haven't already, now might be a good time to sell some of that bitcoin
okay I don't comment on here often, can check my post history, but absolutely would not sell your bitcoin any time soon considering we have a pro crypto president and have an approx 40% chance of a bitcoin strategic reserve within the first 100 days. terrible advice tbh.
3 replies →
Yeah HN has been giving this advice since BTC was at 60k.
And 30k.
And 10k.
1 reply →
Hard disagree. 2025 is going to be a huge pro-crypto year IMO.
Gensler is resigning (bc Trump was going to nuke him on day 1). The SEC replacement, Paul Atkins, is pro-crypto.
https://www.npr.org/2024/12/04/g-s1-36803/trump-crypto-paul-...
Exactly me -- except still a contrarian.. Everything just goes up and up and up.
Gift link: https://www.wsj.com/finance/stocks/stock-market-trading-apps...
Thank YOU
when you re generationally deprived of real estate heroin, you end up with stock market cocaine
it s all partly gambling but different strokes for different generations
Good insured real estate is always a good safe bet. The best conservative investment that current & few past gens could have done while being completely clueless about stocks, markets, politics etc.
People need to live someplace to be just part of society and also to just survive, plus there is emotional and status aspect. Western construction is lagging behind population growth in popular places plus running / ran out of good space. Do the math.
I've done the math for a bunch of properties family and friends have owned, and they were never beating index funds.
Do the math and you'll find that putting your money in an index fund almost always beats real estate, with much less risk and much less work.
It's easy for one property to underperform the market by a lot. It's hard for an index fund to do the same.
I own a $1.5M rental home in a luxury destination and profoundly regret it. The amount of work I put into it was enormous. I'm not outperforming the market, and I can't sell it because the mortgage rate is 2%.
6 replies →
I am not so sure. An article is on the front page of the WSJ (online) about property taxes and insurance becoming more than the mortgage payments.
In parts of the country there's a crash in the works (Sunbelt, Florida in particular).
Where I live renting is substantially cheaper than buying, by thousands a month. You are absolutely better off buying a mutual fund with the difference and enjoying the flexibility of having cash.
I am not so sure what is going on in the housing market, but there is so little inventory in the hotspots, and what appears to be a dump in the no-longer-hot-spots, that it's scarier than buying stocks right now.
At one point I knew I could beat the market with l33t software skills. I was wrong and only realized it after donating about 3k to Wall Street.
I have net managed to beat the market.
My estimate is that I've earned approximately $3/hour for the time I've spent doing so. And I was trading in such thinly traded options that it wasn't a matter of "scaling up" - I was literally only able to make money because I was picking up the pennies nobody else cared about.
(And/or trading on events that were were rare, obvious, and in an area I understood, which also doesn't scale)
Good fun and educational. Not quitting my day job. Because, of course, if you do the math on it, I've lost money playing the market relative to almost any other use of my time unless you consider it an investment in education and entertainment.
Folks have an unhealthy mentality about beating the market, imo. You don’t need to beat the market if you’re not a fund manager trying to advertise your record. You just need to do well.
The market is up 27% YTD. Most global trends suggest, to me, a greater centralization of wealth into the US. Just dumping everything into the SP500 is likely more than great for 99% of people for the near future.
3 replies →
Did you consider writing a bot?
1 reply →
Every so often I receive commercially sensitive information about my company which I'm not allowed to disclose before it's formally communicated to the stock market. For fun, I try to predict what impact it'll have on the share price (though of course I can't actually trade!)
I can successfully predict the direction of the share price movement 50% of the time and successfully predict the magnitude of the share price movement 0% of the time.
Maybe consider using a stock market simulator, make trades based on inside information, and see where you end up in one year? That would be interesting.
>I can successfully predict the direction of the share price movement 50% of the time
50% performance when there are two options is chance, no? So that just means that you can't predict it at all.
2 replies →
But in what time frame, can you predict that?
1 reply →
In the beginning, I donated about $10k to Wall Street. Got smarter, went to university for first finance, then economics. Learned to actually trade. Crushed the market, made nearly $100k annually with starting capital of only $30k. Then realized my life expenses were a significant part of that, I didn't have enough capital to grow it fast enough to both live life and accumulate capital to make trading more worthwhile than simply getting a job with that education. Getting a job + having easy passive investments (like a market fund) was less hours, less stress and more profitable than being a full time trader starting with a middling amount of capital. Also trading is less fulfilling than things like building, entrepreneurship, having a normal job plus hobbies, etc... Lots of traditional entrepreneurial paths also beat the market pretty handily.
It's good story but entrepreneurialism is a lot more than just a chosen career path, like teacher, software developer, product manager. It requires ideas, networking or connections, and usually capital.
And then that leaves working the 9-5 (or if you're in IT it's more like 8 to 6), and maybe getting 10-20% of your salary in bonus at the end of the year.
Rinse-repeat.
Trading is at least exciting.
> only realized it after donating about 3k to Wall Street.
An education in finance is expensive, not matter where you get it from.
3k is much, much cheaper than many college degrees, even from state schools with in-state tuition.
Luckily you learned the lesson when you were young and only lost $3k instead of $3M when you were old.
I too don’t understand why technical analysis isn’t classified as a genre of fiction…
Ugh. I vividly remember when my stepfather tried to get me involved. He was retired, and had a nice nest egg built up from a small business. He was a smart man.
But he was paying thousands of dollars per year for a monthly newsletter that contained <some brand of analysis>. And he patiently showed me how he started with a row in the table that met <his criteria> then followed to the column that met <other criteria> and that was the choice he made in the market.
And I'm thinking, whatever information he's getting in that newsletter is at least a month old by the time he gets it. And he's not doing anything a program couldn't do, with the information in digital form. And he should know that -- he was a computer programmer earlier in life. As far as I could see, there was zero chance he was beating anyone or anything with that technique, and starting in a several thousand dollar hole.
Maybe I was wrong, but I don't think so.
3 replies →
The market is a mind game. If enough market participants care about it, then it defacto becomes a signal to be aware of.
In fact if you're a trader (not a long term investor) that manages to make money in the markets you will by definition use some form of technical analysis.
I think some make money trading just that or am I wrong? I’m not talking about youtubers
1 reply →
That’s peanuts! Congrats for realizing it early
I don't know OP but 3k can be a significant amount of money for some people esp when younger. I realise people often lose more, but that can also be because they have more money padding to lose.
1 reply →
Some folks' elementary or middle schools had stock picking lessons with fake money: https://news.ycombinator.com/item?id=21642395
From mine, all I remember was getting the impression that putting money in particular stocks without knowing what you're doing is a bad idea. Pretty valuable lesson, I guess, as I've never bought individual stocks since then...
7 replies →
A 3k bankroll isn’t remotely close to enough working capital to employ any kind of useful risk management strategy and get any kind of return worth the bother.
Right but if you are wrong you are only out 3k. Many people with more money think they have a good strategy and lose a lot before they realize it wasn't bad luck and risk management but a bad idea.
6 replies →
Eh, I started with not much more than that (£5k) about ten years ago, and now have an eight figure equities portfolio, built entirely from that seed capital.
All buy & hold forever, layered sell-off, buy the next thing, take some profit for me and the taxman. Enough moved into stable instruments (bonds, real estate) that I can afford to lose the whole shebang.
So yeah, $3k is plenty, if you buy inevitable winners. Just… look at the broad sweep of the future and buy supply chains. Shovels in a gold rush and all that.
I've taken comfort in the thought that there are millions of people much more clever than me. If they have not figured out how to game the market there's no chance I will.
So I don't even try.
We've all been there. The house always wins.
But that's not true in the world of stocks. If all the stocks go up, all of the owners are richer. And they do tend to go up, at least on average.. in recent history.
The futures and options markets are zero-sum. For every winner, there's an equal and opposite loser.
1 reply →
Actually, we haven't all been there. Some of us took to heart the lesson from War Games (1983), and apply it liberally:
"An interesting game Dr Falkon: The only way to win is not to play."
3 replies →
The most difficult part about the stock market is that stocks don't move for the reasons people think.
People think fundamentals, news, financial performance, or chart patterns matter. But none of it does.
Markets are driven purely by supply and demand. And in this case, supply and demand for the stock itself.
Fundamentals are already priced in. Financial performance is already priced in. Expectations are priced in, and others probably have more information than you anyway. Other people also watch chart patterns and place their bets based on that.
What you're betting on is whether the market is right, or wrong. Or whether other investors will think the market is right or wrong.
Edit - the other part of it is that Wall Street firms hire tons of people who are incredibly smart, have math, economics and finance degrees or even PhDs, hire software engineers and spend hundreds of millions on infrastructure just to know the market better than you. You're not smarter than all those people put together.
In the long term fundamentals will matter. But the market can remain irrational longer than you can remain solvent.
Ordinarily I would say that an investment in a broad index for the long term (a decade or more) is always wise, and there's no point in trying to time it more specifically than that. However right now it's been irrationally exuberant for a long time. it's going to have to correct itself... Either tomorrow or another ten years.
Depends. If the fundamentals are already good, they're priced in, you probably have little upside, even long term. Maybe you'll just match the market. You have to think the fundamentals will improve over time more than the market expects to beat the market.
Long term, I think economics has more to do with market performance. Stocks rise as the money supply expands and capital has no where else to go.
3 replies →
The market is not efficent. The fundamentals are only partialy priced in. However finding the times when the difference is significant is not easy.
The market is definitely efficient. Try to find arbitrage opportunities (which is what actual market inefficiency is); they disappear in milliseconds.
What you're saying is that it's not infallible as far as predictive power is concerned, which is true. But every current bit of knowledge is definitely priced in.
1 reply →
I don't think it's as easy as "supply / demand" and everything is priced in.
There's many forces at play here, and many different ways to play the game.
Markets are not that efficient, not everything is priced in. Earnings would have 0 effect on price if that was the case for example.
Whether you play the market on higher timeframes or on lower timeframes, different factors come in to play.
I think it's obvious that chart patterns are a thing, (shameless plug here: i'm building https://edgefound.xyz, an app to create and backtest complex trading setups). It's actually interesting how many patterns (or setups) repeat across markets and timeframes. Mostly because prices are set by traders and traders react in the same way to the same events / price movements.
> Expectations are priced in, and others probably have more information than you anyway.
I have always made money on the stock market. I bought Nvidia in December 2022 and then again in April 2023. Yes the information was out there - anyone reading this board back then could see it. Or who saw Emad Mostaque's tweets that Stable Diffusion was trained on Nvidia, or who knew the semi-public information that OpenAI trained on Nvidia. I bought and it quadrupled in two years when averaging out. The expectations on this board were not priced in the market then.
When FAANG and more b2b tech companies (Salesforce, Oracle) tanked in 2022 I poured money into tech indexes like IYW and IGV. Not as much as into Nvidia, but they were good companies and finally and unusually cheap. They went way up too.
I was making money in the 1990s buying SGI, Sun Microsystems, Netscape, Cisco etc. No brainers for me.
Only two losses I recall - Cascade, a router company whose stock dipped and was bought ny US Robotics on the dip (1990s?). Also some ad company which was crushed by competition with Google.
I completely disagree with your premise. I don't even know how to make a neural network in Pytorch, nor can I do matrix math with NumPy. But in December 2022 Nvidia seemed worth the risk, and by April of last year a lot of that risk evaporated with a huge potential upside. I knew the stock was cheap and all the PhDs on Wall Street did not. Also, they are stuck in a bureaucracy - I used to work in IT for a major investment bank in Manhattan. Watch the Big Short on the pressure the people who were right got from their management and investors. I don't have that pressure, it is my money.
We, the people here, do get insights which are not priced in. It's not that there is no risk, but the coin flip sometimes goes 51% in our favor. Sometimes even 52% (or 53%...or 60%). This is how Warren Buffett, Peter Lynch etc. made money.
Read the Wall Street analyses from the middle of last year on AMD being a big Nvidia competitor, then read the posts here this week about how AMD engineers don't have boards to fix bugs. "We the customer had to mail the AMD engineer a spare board to fix the bug". The cobbler's children wear no shoes at AMD. Then go read some Wall Street report about the stiff competition Nvidia faces from AMD. The information is here, not in the Wall Street analysis report by people who know less than me about how transformers work.
> Read the Wall Street analyses from the middle of last year on AMD being a big Nvidia competitor, then read the posts here this week about how AMD engineers don't have boards to fix bugs. "We the customer had to mail the AMD engineer a spare board to fix the bug". The cobbler's children wear no shoes at AMD. Then go read some Wall Street report about the stiff competition Nvidia faces from AMD. The information is here, not in the Wall Street analysis report by people who know less than me about how transformers work.
Are you saying that AMD will not be a serious competitor to NVIDIA?
2 replies →
For every story like this, there’s another story where everything moves in the opposite direction.
https://xkcd.com/1827/
This is known as the Efficient Market Hypothesis, and having an edge against this requires specialization and focus in specific industries in which you have significant knowledge. That, or learning to recognize when the market is surprised by an outcome, and acting fast.
I’m old enough to remember when you couldn’t just buy one share (you had to by a “lot” of 100), and when I actually received a paper stock certificate that I had to sign and mail to my broker. Rubes will try to beat the market and one in 1000 will succeed. Ignore them and follow the basics. I’ve been investing since the 80s and all my peers that did the boring thing are retiring comfortably.
The boring thing being buy and hold?
I remember a controversial scamming figure in Italy that made millions by selling lucky numbers for lotteries or exploiting people's stupidity to part them with their life savings.
Her motto was "idiots _have_ to be scammed".
While this figure was morally and ethically deplorable, it always made me think how her motto essentially implied that there was an element of pure natural selection happening and she saw herself as the executor of the oldest survival of the fittest balancing act.
At the same time, as someone who follows places like WSB seeing people getting in life-ruining leverage just for the adrenaline of it, or even worse, just for internet karma always made me think of that scammer's words: this is just natural selection doing it's thing as it has been for billions of years. And there's no third party scamming them. They know what they risk, and will do it anyway.
The world is full of physical and non physical dangers, we are naturally programmed to push for self preservation and yet there are people that willingly and consciously decide to put it all on risk, how can it be anything but natural selection doing it's thing?
Whats the difference between "idiots have to be scammed" vs "people who can't fend off a knife fighter while en route to the grocery store have to be stabbed"?
Some people are gullible, or trusting. This doesn't mean they don't have other gifts, or most of all good intentions. Applying an evolutionary pressure against people who can't fend off knife attackers is ultimately useless for human wellbeing
The real issue in the world isn't people not being smart enough to fend off attacks, but greed and ego
And besides, what is the root of such a 'idiot' person's deficiencies in the first place? Is it genetics? Or is it education, upbringing, early life traumas that stunt development?
Besides, the whole point of having fit genes in the first place is to bring about human happiness. If we use this to make people miserable it then shows that there is no substance to our perspective
> O CHILDREN OF MEN! Know ye not why We created you all from the same dust? That no one should exalt himself over the other. Ponder at all times in your hearts how ye were created. Since We have created you all from one same substance it is incumbent on you to be even as one soul, to walk with the same feet, eat with the same mouth and dwell in the same land, that from your inmost being, by your deeds and actions, the signs of oneness and the essence of detachment may be made manifest. Such is My counsel to you, O concourse of light! Heed ye this counsel that ye may obtain the fruit of holiness from the tree of wondrous glory.
> ~ Bahá’u’lláh
There’s obviously a huge difference between a scam and a violent attack. The person being scammed doesn’t ever lose their agency and willingly participates. That’s very different from a knife attack, where the victim would leave at every moment if possible.
13 replies →
>Whats the difference between "idiots have to be scammed" vs "people who can't fend off a knife fighter while en route to the grocery store have to be stabbed"?
Consent.
4 replies →
Humans are slow, weak, eminently munchable.
Lions, tigers, bears, etc., can really chow down on humans.
The issue with humans, though, is they gang up, real good. Eat one (that others care about), and twenty come after you with belt-fed machine guns.
Psycopaths may consider themselves to be predators, and "suckers," prey, but they tend to suffer the same fate as maneater lions, if they eat the wrong prey.
There are hunters even for predators...
[dead]
Descriptively not obvious at all.
Shitty people always have ways to justify their behavior to themselves. One of the benefits of the market is it launders this justification so nobody has to feel guilty for the destruction it wreaks on human society.
Edit: Social Darwinism and justification of the private market economy are inextricably linked. I do think there is some merit to, well, divvying resources by merit, but our current world sees such an exacerbation of resource division the idea it reflects actual merit is absurd.
This is a position commonly referred to as "Social Darwinism." The same logic can get you to "drunk women out by themselves _have_ to be sexually assaulted" and so on. No, it's not OK to victimize people just because they're vulnerable. It's an absolutely odious caricature of moral reasoning.
I disagree with the comparison. A "drunk woman out by themselves" is, at the end of the day, just a person exercising their right to exist. A stock-market gambler, on the other hand, is literally betting on the bad decisions of whoever is on the other side of their trades. It's a predatory position to be in, and deserves a whole lot less sympathy.
5 replies →
Not at all. Money represents resources, and it’s objectively better for society for resources to be in the hands of people who are not fools, instead of those who are.
5 replies →
I like this
Does anyone have evidence that these so called “idiots” have fewer grandchildren as a result of being scammed? If not, this “natural selection” mechanism isn’t working
> And there's no third party scamming them.
Sure there is. Retail investors are prey for more sophisticated investors. Getting people on WSB to make bad financial decisions is cheap and easy. I would be astonished if it isn't thoroughly astroturfed by hedge funds and other financial professionals.
I can think of one such example where the populace emphatically said retail investors were getting screwed, and AFAIK, conclusive proof was never found.
The claim was that Citadel was frontrunning Robinhood's retail investor order flow, which Citadel's market making arm paid for. The masses claimed that this was an extreme conflict of interest, and Citadel "must" be scalping the retail investors. However, the suspected reality is that Citadel was merely providing a market making service that (a) Robinhood couldn't do as well as a non-core activity and (b) for cheaper. Here's a Matt Levine overview [0] from 2021.
[0] https://www.bloomberg.com/news/newsletters/2021-08-31/what-h...
Social Darwinism is the cornerstone of protofascists, their main moral justification, so I'm not surprised to see it comeback tbh.
> Her motto was "idiots _have_ to be scammed".
So all Americans in context of health insurance? All Italians in context of their byzantine bureaucracy and taxation system? All Europeans in context of social and retirement systems? All developed world in context of housing market? It turned into dog eat dog "eat the sucker" attitude. On top of the hierarchy we got really nasty predators, they look at YOU and see an idiot sucker.
Moreover, when this kind of attitude prevails, there are costs to the society at large. In a low-trust society, everyone needs to invest in walls around their house-compounds, and to avoid going out at night. You need to keep your wits about you to avoid scams and pickpockets -- mental energy that might otherwise go to other purposes. These small costs then compound across the whole of the society: There is less economic growth, there is less technological development. More individual wealth is required to maintain the same overall quality of life. Would you rather be a middle class person in 2024 or a medieval king? In those societies you're, at best, more like the medieval king. It's not as good.
The solution to these kinds of game theoretic issues is strong social norms, and punishment for violation. If this woman is scamming people, she needs to face consequences -- ideally within the official legal system, but perhaps also informally.
> All Europeans in context of social and retirement systems?
Can you please explain? You probably know something I don't
3 replies →
Most of the social protections and regulations underpinning life in the 'developed world' came about due to the horrors of the Great Depression and World War II. States knew that without a social safety net, availability of jobs and housing, national unity would be impossible to have, especially with an expansionist Soviet Union next door.
All of these lessons are being rapidly forgotten. Casino capitalism wrecked people's retirements in 2008. Almost 2 decades on, housing costs are out of control for millions of working people, because private equity can buy homes with cash at 0%, while families have to show all sorts of creditworthiness for the privilege of paying 6%.
On top of that, businesses that are already profitable (Google/FB, oil and gas, banks) are now charging even more because they can get away with it.
> how can it be anything but natural selection doing it's thing?
Does it affect their reproductive chances? If not, then natural selection has nothing to do with it.
It’s overly simplistic to say that if a person has reproduced, then they have ‘succeeded’ in the natural selection game.
There is a whole (potential) downstream genealogical tree branching off from each individual
Certainly, any person who reproduces has done “better” at the game than someone who has not reproduced at all. But that is still not quite enough.
If a parent reproduces, but none of their children themselves reproduce, then the parent has not actually succeeded in the game.
A gambling addict who can’t hold onto any money absolutely affects their downstream tree.
3 replies →
Take a wider view - the people with economic power are generally the people who use it for economically sensible things. Someone who spends irrationally is going to end up with no money. This is a similar process to natural selection - because the unviable strategies are removed, everything that is around is using a viable strategy. This woman was forcing people with unviable financial beliefs (that led to them being easily scammed) to give up their ability to exert economic pressure. In that sense, the same processes as natural selection are at play and we can call it the same thing.
Although I don't buy the logic in a lot of edge cases, it is somewhat necessary that these tactics are legal. Diverting resources to people who waste them is ruinous.
4 replies →
The purpose of sneering about "idiots" and inventing pseudoscientific gibberish about natural selection is to wash one's hands of moral responsibility for scamming naive young people, the elderly, or adults with psychiatric or cognitive disabilities. "It wasn't me robbing your college-age son out of a new car, that was just natural selection doing its thing! So long, losers!"
My mom was a very crappy person who strongly believed in the "sucker born every minute, separate a fool from his money" mantra. I think it's become a core American ideology.
10 replies →
It absolutely does
I fail to notice anything natural about this selection.
Exactly. We seem to refer to these ideas somewhat casually, don't we? For example, selfish gene, natural selection, entropy, etc.
That's where you make your fundamental mistake. We are not programmed for self preservation.
Inside us, there are different drives that shape our behaviour.
https://www.paulgraham.com/cornpone.html
One of the justifications that psycopaths and sociopaths use is exactly this - If their victims weren't so stupid, they wouldnt be victims. (Often mixed with the "if I didnt exploit them, someone else would"). Its an excuse to rationalise and try to justify their bad behaviour.
NATURAL selection is built to deal with NATURAL problems, and they move and change and evolve at the same speed, natual selection changes at the speed of genetic mutations of large populations, we didnt have smartphones even 1 generation ago - so how the hell is natural selection supposed to adapt to that?
When you have an electronic device thats beaming in risky behaviour at millisecond latency, what's the difference than having a big pile of cocaine in the kitchen and then blaming the addicted person saying "Its just natural selection, that enourmous pile of drugs thats just sitting there - you took it willingly", this is hyperbole but its illustrating my point - immediate availabity of dangerous risky addictive behaviour is a problem that will seduce a lot of people that otherwise would not have had the problem.
Im definitly someone in favor of personal responsibility but "ne quid nimis" and this must be balanced by a strong culture with good leadership to help the people who cant do it by willpower alone, so saying "Its just natural selection" is pure sociopathic / empathy-less answer and is unacceptable in a world where we should be helping and guiding each other and not saying "sounds like a you problem" while cranking up the exploitation dial.
Yup. It’s just an excuse for their awful behavior.
>One of the justifications that psycopaths and sociopaths use is exactly this
>NATURAL selection is built to deal with NATURAL problems,
Human psychopaths essentially evolved (meaning they are generally hardwired) to exploit the niche of stupid/gullible people. You will see this in various species, i.e a parasite/host behavior. ( eg cookoo laying eggs in the nest of other birds).
No saying that it's a justification for psychopathy, but just stating the way things are.
Don't believe what you read on WSB. Most of those clowns are getting Internet karma points by making up stories, not by losing real money.
I can assure you that many of the posts there are real. If you have market data you can verify the transactions yourself.
Is the person from Naples, perchance?
No, her name is Wanna Marchi.
Now do drug-development.
"I'm not gambling! I'm smart." [proceeds to repeat this mentality, as it all dwindles away]
I make enough trading to live off of. Sure, I lost small amounts of money for about 15 years to get good enough at it to do well the last 4 years, but now I spend a lot of time looking at the market because it's basically my job. If I had a real job, I'd spend all my time peeking at the market, and probably make less money, lol.
I'd say it's a great job for generalist news junkies. Also, now with AI you can have it grind through hundreds of pages of stuff. It's like having your own hedge fund research department. Getting over the psychological difficulties to becoming a good trader and unlearning bad conventional thinking takes a while though. It's why good traders are such non-conformists. They have trained themselves to not trust crowds and instead determine the truth themselves in controversial matters and then ride the crowd as it slowly realizes things.
The hardest thing about investing is to not turn it into gambling.
Lots of luck involved, even if someone think skill was involved. You will see many hedge fund have down years and go bankrupt, all of these hedge funds have “skill” like every one else
There’s something to be said about our economy that doesn’t seem to value hard work and long term planning anymore for the prospects of a middle class life. It’s not enough to study hard, work hard, climb the ranks of a company, etc. Those days are over. For most people, buying a house and raising a family (normal, healthy aspirations) are out of reach.
We live in a ruthlessly “meritocratic” society. Not that we have a meritocracy but we very much value the idea of merit earning wealth. But the corollary to saying that people with merit will do well is that people who aren’t doing well must not have merit. In other words they are useless.
For a person (especially young men) without the luck or credentials to be considered to have “merit” their only chance to make it is to bet it all on black. I would suggest that’s not a very healthy or sustainable way forward.
Gambling addiction is so unrelateable to me. Likely real drugs sure, obsessive gaming, done that too. I think I'm to anxious to enjoy gambling with like that or something.
Likewise! I can understand drugs and such… But gambling? At least with drugs you have a guaranteed reward. You purchase heroin and you use it, you’re high. Task accomplished gambling it like “here’s money so I might possibly get high if I’m lucky.”
Gamification of trading is the trend that should be regulated! It blurs the line between investing and gambling.
At some point the US will have to come to terms that the insane libertarianism that it shows to individuals is not a recipe for them living a good or meaningful life. Modern life makes it extremely easy for men to ruin their lives, with gambling, drugs, alcohol, screen addiction etc. We know what a good life looks like, we lack the will of forcing people who make destructive decisions into living the good life. Until that is done, things will keep getting worse.
TV adverts for day trading apps specifically target middle-aged men who think they know better than everyone else.
Surprise! You do not
Most people have a gambler’s mindset about the stock market:
> […G]ambling in financial markets often goes undetected […] because individuals confuse their actions [i.e., speculating] with investing.
The typical person speculates on the market — buying low during their working years, and hopefully selling high during their retired years.
I don’t think this is the right analysis. One should generally expect a positive return over time from investing in equities: you are giving up money now and taking on risk, and you are compensated for it by the return on investment. The word ‘speculating’ is generally referring to a different kind of activity from the kind of investing a typical person gets through paying into a pension. I don’t want to make claims about what typical people are doing with brokerage accounts, and the structure of brokerages seems to have changed enough that it’s perhaps harder to describe long term trends or the lives of ‘typical’ customers.
Fair point. There’s a real difference in attitude between speculation and saving. Most people buy stocks to save for retirement, not to speculate that they’ll have enough money for retirement.
But most people aren’t investors, either. Typical people buy stock for their returns, not for their productive capacity. My point is that’s speculation.
Most people have a speculator’s mindset. They would be happy to make a windfall on the market. For example, who wouldn’t be happy to own a plot in downtown Detroit before an economic boom raised land prices? Or stock in a startup before an established company announced they would acquire it?
Although someone who puts money in the stock market for retirement may intend to save money, since a 401k seems like just any another asset, but it’s quite different from other assets: Bank accounts fund lending to companies for productive investments. Homes provide a residence. Bonds provide money to countries and companies for investment. But when individuals put money in the stock market, it’s because they hope the asset will appreciate.
That’s because that’s all we can do. Buffet is an actual investor. His stock position allows him to remake a company if necessary. My stock position might buy some chickie bugs at Wendy’s. I have no direct control over any company I “own” and my voting position and the position of all retail investors is functionally nil.
not a lawyer here but I suspect that exercising rights as a shareholder takes some legal education and some networking.. you are right that the DEFAULT stance is what is presented.. but somehow I dont think this the whole possible story in 2024
Even worse is the 'air drop' craze of the crypto world. I also think the people that invested (and lost) their money in HAWK coin knew what they were doing.
They wanted to pump and dump the coin and couldn't get out fast enough. It's just another way to gamble.
Dunning Kruger IMO makes it quite likely that any substantial investment be a bit more like gambling than it ideally should be, as the difference really only exists in the amount of knowledge one has in the industry one invests in.
On the other hand, most financial advice also states that one should not keep more than X months worth of expenses in cash, otherwise one is still losing money on inflation and the likes.
EDIT: Then again, if you are staring at the tickers all day, that might still be a problem.
It may turn out that in the “next epoch,” our stock market will be understood as our civilization's greatest work of art - our greatest cathedral to capitalism.
The real elephant in the room is sports betting. Sports has mainstream appeal and accessibility that stocks will never have (primarily white collar with good jobs).
Every libertarian theory about legalizing gambling has been wrong. Marketing and ease of access increase use. It’s making sports worse and hurting young men.
Pure schadenfreude for retards who use Robin Hood thinking they are making money…
Wait until the WSJ discovers memecoins.
Capitalism-meritocracy= lottery. This feeling percolates deeply into society over time.
[dead]
[flagged]
No future for you.
What does this mean?
It's a reference to the Sex Pistols song, God Save the Queen. https://en.m.wikipedia.org/wiki/God_Save_the_Queen_(Sex_Pist...
A guess, but I think they may be suggesting that when men don't see a future outside of striking it rich, they turn to gambling.
downrightmike, please chime in if I'm reading it incorrectly.
1 reply →
[flagged]
Poor emotional regulation skills and executive function, perhaps.
Yes, that's ADHD, and I can tell you that playing the stock market for income will lay bare every single thing that is wrong with you. Becoming a good trader turns into just becoming a better person, adopting better coping mechanisms and developing extreme discipline.
And that doesn't happen in just a year or two. I recommend people to start off paper trading for years before putting down any real money.
[flagged]
[flagged]
Really? It works fine for me. What browser are you on?
I recognised the comment .. it was made three days ago when this link was first submitted.
https://news.ycombinator.com/submitted?id=marban
This HN post has been "second life"'d and made fresh again with this one original comment refreshed in timestamp.
Why? No idea - Le Mystère des HN.
Firefox v133.0.3
Dupe: https://news.ycombinator.com/item?id=42473081
On HN a post only counts as a dupe if it got significant attention, which that one didn't (only 3 points and 2 comments - but we'll merge the comments hither)
When an article hasn't had significant attention yet, we let reposts through (after 8 hours) - this is on purpose, to give good articles multiple chances at getting attention.
Of course that leaves the submitters in a bit of a lottery situation, but it at least evens out in the long run if you keep submitting good articles!
Understood, thanks dang! I think sometimes I just get annoyed because I see something I posted earlier getting reposted. I’ll try not to let it get to me going forward lol.
The problem is, they are "trading" from smartphone apps. Remember this - no money will ever inflow into your bank account from scrolling and tapping.
There's a paper I saw a while ago that uses LSTM for some kind of technical analysis trading, and the portfolio grew from 115k to 155k in a year, but also consistently
Seems like there's clear patterns to the market. If only these apps would teach people these patterns and trading techniques in depth rather than just letting them trade
There's a paper I saw a while ago that uses patterns for some kind of roulette strategy, and the bankroll grew from 115k to 155k in a year, but also consistently.
Seems like there's clear patterns to how roulette tables operate. If only casinos would teach people these patterns and strategies in depth rather than just letting them play.
The sp500 did 20%+ over 12 months. Hardly worth trusting the llm
This title is stupid. Comparisons to crack cocaine should have stopped in the 90's or early 00's at the latest. They're never made by people who have the slightest idea about what idea crack was, and whoever wrote that is extremely out of touch.
About crack: The public discourse was racist, the CIA had a lot to do with creating the problem, and in general it's no worse than the cocaine my fellow white people seem to think is so much cooler.
By someone who tried both cocaine (snorted) and crack (smoked), the craving is much stronger with crack. That's because it is much faster acting, it also wears off faster, and he said that part of him was ready to get violent for an other dose as it happened. Other than that, the effect was similar, it is the same molecule after all.
It is common to smoked drugs in general. For what I know, smoking is the fastest route of administration. That instant gratification makes it more addictive than slower routes of administration, like snorting in this case.
It doesn't mean the laws weren't racist, but crack cocaine is more addictive.
It is worse than powder cocaine though, just as meth is worse than an extended release Adderall despite both being amphetamine variants. I believe meth (a "white people drug") carries harsher penalties than other forms of amphetamine?
You have to see real compulsive gambling in action. The comparison is not so far off (but still over the top).
I know what kind of havok a gambling addiction can cause, and it's no joke. It's powerful enough (for some people, at least) that a comparison to addictive drugs generally is apt, yet the traps are everywhere and usually legal. Exploiting the psychological weakness that underpins gambling addiction is something sought after and optimized for outside of overt gambling, like modern video game mechanics, social media, cryptocurrency, retail stock investment, and so on.
In reflecting on why it's so addictive, I've come to believe there's a sort of feeling of adventure in random outcomes --that people like the entropy as well as the wins.
That said, going back to what I said before, my issue with the title of the article is with invoking crack specifically as some especially scary super-addictive thing, which is an idea that was over-hyped at one time. They could have just said cocaine, or better yet, made a comparison to opiates, but they're playing to an old and incorrect bias.
5 replies →
Powder cocaine cannot be smoked at all (https://en.wikipedia.org/wiki/Free_base) and smoking anything naturally carries additional risks.
If it didn't make a meaningful difference in the experience but only increased the legal penalties, there would be no good reason for dealers to prepare crack, yet they did.
Nothing about a the race of a cocaine addict compels that addict to prefer one form or the other.
The comparison is made as a metaphor for strong addiction exactly because of the old political connotation. Those don't just go away. There are almost certainly more addictive substances out there; that is completely irrelevant to how humans use language. I would argue, even the phrase "crack cocaine" has more sticking power because of the phonetics.
Hey look, it's Ryan from The Office
I had to google it, but I guess you're insinuating that I've done crack?
Fact is, it's smoked cocaine, and the level of scaremongering about it was pretty absurd compared to powder cocaine, amphetamine, or opiates, all arguably just as bad.
1 reply →