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How Amazon Can Blow Up Asset Management

jirisancapital.com

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Re: How Amazon Can Blow Up Asset Management

#71

Post by ceejayoz »

anonu wrote: post #70
compsciphd wrote: post #7

Earlier quoted context omitted.

vanguard and fidelity offer approximately 0 cost S&P500 funds already today. you're talking .03% in fees. On a $1Mil investment that's $300 a year.

3bps is certainly dirt cheap - but thats purely explicit cost. You have to look at how the fund is managed. If the fund manager is an idiot and forgets to rebalance or makes some other error - that 3bps can pale in comparison to missing the benchmark.

Is there any reason to believe that cheaper fund managers like Vanguard forget to rebalance?

Re: How Amazon Can Blow Up Asset Management

#72

Post by anoncoward111 »

mabbo wrote: post #53

Why does it have to be Amazon? Look, Amazon's strategy isn't complicated. Find a market where margins are large ("your margin is my opportunity"). Bring a simple, easy competitor to the market and aim for zero profit. Grow wildly. Build related products that either your customers want (and go elsewhere for) or else you are currently spending money on. Repeat until billionaire. Anyone with some capital, industry-speci…

If a VC or an angel investor would just give me $10,000 a year as salary, I would work on any idea full time for them, 90 hours a week, fighting fires, everything.

The issue is that the labor demand in this country (VCs, corporations, angels, basically anyone with money) would much rather prefer to spend $120,000 on one "really good" programmer than say $30,000 total on a team of 3 young and hungry programmers.

Something something, "adding programmers = adding delays and complexity to a project". And maybe it's true.

But the result is that the one amazing programmer lives lavishly, and the other 3 starve.

And what is worse, there's no guarantee the project will succeed, no matter who you hire.

Re: How Amazon Can Blow Up Asset Management

#73

Post by sten »

scottlegrand2 wrote: post #63
barry-cotter wrote: post #43

Earlier quoted context omitted.

On fakes being of high quality I imagine it varies by market and supplier. If real Calvin Klein underwear is better than the thirty I got in Thailand four years ago it’s made of angel feathers and adamantium.

One of my in-laws more or less pioneered the entire clothing manufacturing industry in Southeast Asia. Watching him and his wife tear apart garments by looking at the stitches and feeling the fabric is incredibly entertaining. It's on par with the way I tear apart other people's code on GPUs. 10,000+ hours doing anything gives one some serious skill. I've even used their expertise as evidence that AI and machine lear…

Can you PM me the names of the books. My wife does a lot of that stuff and she'd either be very interested or insulted that I gave her more work to look at.

Re: How Amazon Can Blow Up Asset Management

#74

Post by jeffreyrogers »

thisisit wrote: post #4

Amazon has a serious problem with counterfeit goods and fake reviews. One might think that with the rise of AI/ML catching fake reviews and counterfeits will be much easier but Amazon doesn't seem to be doing any thing. In which case, allowing them to handle money seems like a recipe for disaster. As for the Ant Financial comparison, I find it hard to believe that Amazon is not utilizing the reserves it gathers by se…

I don't really use the reviews on Amazon any more for making decisions. Typically if I'm buying something on Amazon it's a book, and I already know I want it because someone I trust recommended it, or it's some random thing I want like speakers or a bike tool or something and I just research what to buy online before I go to Amazon.

Re: How Amazon Can Blow Up Asset Management

#75

Post by jeffreyrogers »

anonu wrote: post #70
compsciphd wrote: post #7

Earlier quoted context omitted.

vanguard and fidelity offer approximately 0 cost S&P500 funds already today. you're talking .03% in fees. On a $1Mil investment that's $300 a year.

3bps is certainly dirt cheap - but thats purely explicit cost. You have to look at how the fund is managed. If the fund manager is an idiot and forgets to rebalance or makes some other error - that 3bps can pale in comparison to missing the benchmark.

Vanguard doesn't miss the benchmark. They're good at execution.

Re: How Amazon Can Blow Up Asset Management

#76

Post by anonu »

ceejayoz wrote: post #71
anonu wrote: post #70

Earlier quoted context omitted.

3bps is certainly dirt cheap - but thats purely explicit cost. You have to look at how the fund is managed. If the fund manager is an idiot and forgets to rebalance or makes some other error - that 3bps can pale in comparison to missing the benchmark.

Is there any reason to believe that cheaper fund managers like Vanguard forget to rebalance?

Ah - no - I wouldn't think someone like Vanguard would forget. I was just highlighting that the "headline cost" number isn't the only cost you should consider.

Guys like Vanguard actually make money on their rebalances because they are so big. And they keep it in-house - avoiding the costs (both explicit and implicit) of outsourcing their flows to other firms. So being large brings economies of scale as well.

EDIT: By "make money" I mean they use their cost-savings to make or beat the benchmark

Re: How Amazon Can Blow Up Asset Management

#77

Post by TheBeardKing »

jraby3 wrote: post #45
deanCommie wrote: post #34

Earlier quoted context omitted.

> but Amazon doesn't seem to be doing any thing. I would have thought that on Hackernews of all places people would recognize the scale that is involved with a site like Amazon and recognize that fixing this problem is far from trivial. I'm sure Amazon is taking it very seriously - when have they ever shown anything but "obsession" about positive customer experiences. But it is hard, and it will take time to do it ef…

I disagree. There seems to be so much low hanging fruit to at least reduce the problem but they haven't taken even the smallest steps. This is because they're prioritizing revenue, volume, and selection over fraud prevention.

Not true, they banned incentivized reviews. That's a big step towards getting more accurate reviews.

Re: How Amazon Can Blow Up Asset Management

#78

Post by baumy »

anoncoward111 wrote: post #72
mabbo wrote: post #53

Why does it have to be Amazon? Look, Amazon's strategy isn't complicated. Find a market where margins are large ("your margin is my opportunity"). Bring a simple, easy competitor to the market and aim for zero profit. Grow wildly. Build related products that either your customers want (and go elsewhere for) or else you are currently spending money on. Repeat until billionaire. Anyone with some capital, industry-speci…

If a VC or an angel investor would just give me $10,000 a year as salary, I would work on any idea full time for them, 90 hours a week, fighting fires, everything. The issue is that the labor demand in this country (VCs, corporations, angels, basically anyone with money) would much rather prefer to spend $120,000 on one "really good" programmer than say $30,000 total on a team of 3 young and hungry programmers. Somet…

This comment is so odd I'm not sure where to begin.

You would work more than 2x full time hours on any idea proposed by some VC for ~$2.25/hour? And you think there is an availability of competent "young and hungry" programmers who would do the same? And the lack of availability of this arrangement is causing these young hungry programmers to starve?

Is this entire comment some kind of joke or satire that went over my head?

Re: How Amazon Can Blow Up Asset Management

#79

Post by strgcmc »

anoncoward111 wrote: post #72
mabbo wrote: post #53

Why does it have to be Amazon? Look, Amazon's strategy isn't complicated. Find a market where margins are large ("your margin is my opportunity"). Bring a simple, easy competitor to the market and aim for zero profit. Grow wildly. Build related products that either your customers want (and go elsewhere for) or else you are currently spending money on. Repeat until billionaire. Anyone with some capital, industry-speci…

If a VC or an angel investor would just give me $10,000 a year as salary, I would work on any idea full time for them, 90 hours a week, fighting fires, everything. The issue is that the labor demand in this country (VCs, corporations, angels, basically anyone with money) would much rather prefer to spend $120,000 on one "really good" programmer than say $30,000 total on a team of 3 young and hungry programmers. Somet…

This makes very little sense.

If you are willing to work 90 hrs/wk for $10k salary, why not take a regular 40 hr/wk job for $10k salary (or more even, why limit yourself?), and spend the other 50 hours doing whatever you were going to do?

There are plenty of $10k/yr 40-hour-work-week jobs that don't require any mental load after you clock out, and don't pretend like you won't get anything done in those 50 remaining hours. If you can't build anything with 50 hr/wk to use (which is more than enough for a regular full time job), it seems unreasonable to assume that somehow adding more time would solve the problem.

This assumes we take you at your word that you can be productive for 90 hours, and that you live or are willing to move to a country where $10k/year clock-in-clock-out-and-forget-about-it-work can be found relatively easily.

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