Comment by bluepizza
2 months ago
> 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...
I think it would be much better if the comments here focused on the benefits of passive, long term investments in index funds. As it is, I worry people will “correct” by leaving money in a savings account instead.
>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 gambling addict thinks they can learn to play poker because there is a small elite of professional poker players.
Which is exactly what an amateur trader thinks - I will learn to beat the market, because Ray Dalio did.
I used the poker example precisely because of this parallel between a very small elite and an overwhelming majority of loss makers.
You're right in that sense that people think they can learn to be the best, and fail at it, as only few succeed. The game wouldn't have tournaments if that were true no one could consistently win financially.
You're also right that it triggers the addiction itch in some vulnerable individuals!
I play poker and would never be stupid enough to put real money on it. It's great as a social game for me where 25 dollars is the risk.
Don't hate the game...
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