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Ask HN: Getting Started Investing

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Re: Ask HN: Getting Started Investing

#41

Earlier quoted context omitted.

Do you want him to lose every dollar? Most penny stocks are garbage. Generally low volume, occasional pump-and-dump scams, fake news from paid stock promoters, etc.

So you’re saying it great practice! Do a study on the survival rate of the average AngelList offer. I didn’t say penny stocks. You can try names you know and like: SMAR, SSTI, PS, etc

You did say micro cap though. The ones you list are really small caps...

Re: Ask HN: Getting Started Investing

#42

Earlier quoted context omitted.

So you’re saying it great practice! Do a study on the survival rate of the average AngelList offer. I didn’t say penny stocks. You can try names you know and like: SMAR, SSTI, PS, etc

You did say micro cap though. The ones you list are really small caps...

You’re right.

Re: Ask HN: Getting Started Investing

#43

Do you really want to invest in early stage, high risk ventures that have a low probability of return? Open a Vanguard or Fidelity account. Buy index funds. Invest regularly. In 10 - 15 years you'll have a small fortune.

> In 10 - 15 years you'll have a small fortune.

More specifically, if you invest $150k per year for 15 years and get a 7% return, you'll end up with right around $4 million.

Re: Ask HN: Getting Started Investing

#44
post #2

Do you want to invest, or to gamble? At your level of available funds, investing in startups is gambling, because you can’t spread your bets widely enough to hedge them and increase the likelihood that gains on one will make up for the losses or break-even on the rest. If you want to invest , I recommend index funds.

> you can’t spread your bets widely enough to hedge them

What does hedging mean in startup investing? I'm used to the meaning in securities where you take an inverse position to limit losses.

Re: Ask HN: Getting Started Investing

#45
post #44
post #2

Do you want to invest, or to gamble? At your level of available funds, investing in startups is gambling, because you can’t spread your bets widely enough to hedge them and increase the likelihood that gains on one will make up for the losses or break-even on the rest. If you want to invest , I recommend index funds.

> you can’t spread your bets widely enough to hedge them What does hedging mean in startup investing? I'm used to the meaning in securities where you take an inverse position to limit losses.

I probably should have said “diversify” instead.

Re: Ask HN: Getting Started Investing

#46
post #24
post #16

Earlier quoted context omitted.

Contrary to the stock market, Bitcoin _is_ a zero sum game.

Could you expand on that please?

If I understand bitcoin correctly (I probably don't); Mining a block is finding some numbers (maybe they all have to be prime?) whose product is a large number ending in a specified number of zeros. Hence the zero sum game comment :)

Re: Ask HN: Getting Started Investing

#47
post #23

Earlier quoted context omitted.

Sounds like it's just a problem of identifying arbitrage opportunities then. I.e. the problem isn't actually that there isn't enough places to put money. The problem is identifying systemic biases in the investor landscape (e.g. a bias against diversity, as just one potential example).

This might be related but I think the bigger arb opportunity is looking outside of SF/NYC. There are some PE funds operating in the Midwest and doing great, but I think it’s still pretty difficult to find early/growth equity funding.

Isn't that just choosing wise places to put your capital? Where's the arbitrage?

Re: Ask HN: Getting Started Investing

#48

Do you really want to invest in early stage, high risk ventures that have a low probability of return? Open a Vanguard or Fidelity account. Buy index funds. Invest regularly. In 10 - 15 years you'll have a small fortune.

Specifically recommend buying SPY (tracks the S&P). Then with a smaller subset you can speculate on individual companies/stocks after doing research.

Re: Ask HN: Getting Started Investing

#49
Find the startup places: conferences, meetups, etc. Be somewhat discreet about saying you have money to invest, that's a good way to get scammed. Basically you need to social-network the hell out of the place so you can get good startups to come to you. You may also need to provide some additional benefit to startups - domain knowledge or contacts about something of value to them.

Eventually you will find the other angel investors in your area, and collaborate with them.

$100k is probably enough to build a small software product, especially if you can find a tech co-founder who is putting in sweat equity. The process of doing this will teach you a lot even if you never make back the $100k.

Re: Ask HN: Getting Started Investing

#50
post #43

Do you really want to invest in early stage, high risk ventures that have a low probability of return? Open a Vanguard or Fidelity account. Buy index funds. Invest regularly. In 10 - 15 years you'll have a small fortune.

> In 10 - 15 years you'll have a small fortune. More specifically, if you invest $150k per year for 15 years and get a 7% return, you'll end up with right around $4 million.

What percentage of people, even in this industry, can afford to invest 150k a year?
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