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How to increase your luck surface area (2010)

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Re: How to increase your luck surface area (2010)

#121

Post by rubicon33 »

darkerside wrote: post #103
PartiallyTyped wrote: post #66

Earlier quoted context omitted.

Being a 4 digit net worth grad student in Europe, riding a few meme stocks just for a short-while has increased my 'wealth' and given me tremendous amount of financial freedom. I understand that the odds are against me, but really, the expectation even when accounting for variance, and adjusting for risk tolerance are a no brainer to me. I made >40% of my net worth in the first 2 weeks of January alone, and with GME…

The trouble is that, if it works, why wouldn't you try it again? You're not only a single data point, you are also a snapshot in time. Two months ago, you didn't have much. And, unless you truly decide to stop doing what you're doing, you are likely to have about the same two months from now.

This is exactly right. Posts just like OPs can be found all over the internet, yet it doesn't change the simple facts. Rarely, if ever, do these people come back months later to report that indeed they kept trading and lost all of their gains (if not more). What you have in OP is a snapshot in their time; hardly the complete story. Time will tell, as they say.

Re: How to increase your luck surface area (2010)

#122

Post by alexashka »

kharak wrote: post #11

Being passionate about something for a long time (not just a couple of hours or weeks) seems to be a rare quality. Too bad for those who lack it, as it seems to be a requirement for success in everything. There are so many posts that try to tell you how to get the most out of your passion, I haven't seen one that explains the origin of passion or whether it is possible to become passionate.

> Too bad for those who lack it, as it seems to be a requirement for success in everything.

There is no shortage of evidence to the contrary.

Passion talk is out there because it works in fooling people who don't have what it takes to be 0.001%, into believing they might, long enough to buy self improvement seminars/tapes/programs/etc.

Here is an easy way to get success - define success to mean something realistic and that would work for you. For most people, that's working a stable job, finding a husband/wife, having a couple of children and living in a safe neighbourhood. That's completely attainable for most people and it doesn't require any passion - a little planning and perseverance will do just fine.

Re: How to increase your luck surface area (2010)

#123

Post by dehrmann »

threedots wrote: post #114
dehrmann wrote: post #107

Earlier quoted context omitted.

> I'd guess most of my friends who are professional investors are the same I'm curious about this. Hedge fund guys make enough to be accredited investors, but they mostly don't invest in them? Are the minimums too high? Are the yields not that great? I know the 2010's weren't great years for hedge funds. I also halfway wonder if the real product hedge funds sell is complex strategies to pension fund manages who think…

It's a good question. I can only speak for myself but I would only be interested in investing in a very small number of funds and they don't want my money (or sometimes anyone's money). Unless you are convinced a fund adds value after fees it's very hard to justify when you can construct your desired market exposure with passive products which are much cheaper and more liquid. It's painfully boring to do that so like…

> or sometimes anyone's money

Medallion...

Re: How to increase your luck surface area (2010)

#124

Post by stouset »

Judgmentality wrote: post #97
stouset wrote: post #96

Earlier quoted context omitted.

> There's also orders of magnitude more money to be lost, because there's just more money on the table. And my point is that the losing side of this is inevitably going to be the majority of people long $GME. > The market can remain irrational longer than you can remain solvent. Billionaires can remain solvent longer than you can remain irrational. Again, Melvin is almost certain to lose their shirts on this. But the…

> Billionaires can remain solvent longer than you can remain irrational. Melvin Capital has a very real chance of going insolvent. Also have you heard of Lehman Brothers? Hell, just watching Cramer get upset is enough for me to realize the rich aren't happy with what's happening. It seems pretty obvious they're worried. Why else would they pay for ads claiming to have closed a position for which they supposedly no lo…

> Melvin Capital has a very real chance of going insolvent

I just don’t know how many more times I’m going to have to say that Melvin is going to lose everything.

Melvin and WSB are not the only two players in the market.

> Also you're completely missing the point. Do you not even understand most of these people aren't trying to make money? If you don't understand that, then you don't even have a basis to start the conversation.

That’s the meme. We’ll see how the people with tens of thousands YOLO’d feel when things turn south.

And if that’s the point, that makes this whole thing all the more depressing. They’re sticking it to the hedge funds by… blowing a bunch of money taking out one while dozens of others profit off of them?

Good luck with that.

Re: How to increase your luck surface area (2010)

#125

Post by tylerhou »

salty_biscuits wrote: post #112
tylerhou wrote: post #83

Earlier quoted context omitted.

Expected utility is positive implies that people have discontinuous utility functions wrt. money. That is, utility will jump significantly after reaching a certain net worth. Another explanation that is consistent with gambling behavior is that people have inaccurate risk functions; that they overestimate positive upside and underestimate downside. I am not familiar with the economic literature. But I believe that th…

The obvious discontinuity is "never have to work". People talk about this all the time when they talk about this stuff.

> The obvious discontinuity is "never have to work".

First, wanting to achieve "financial independence" does not imply a discontinuous utility function.

Suppose it takes $X to reach financial independence. Let's say that when I achieve $X, I have utility Y. It is possible that as I approach $X from the left, my utility continuously approaches Y.

In fact, I argue that's what happens for most people who have a FIRE goal — they get happier and happier until they reach their goal. (It's true that once they reach their goal and experience retired life, they decide that retirement's not all that it's cracked up to be, but I argue that's because their utility has dropped because of another variable has changed: they have stopped working.)

In other words, "wanting to not have to work again" and "having a continuous utility function" do not contradict each other. And the people who are dedicated to saving enough money to not have to work (FIRE) almost always have utility functions that are continuous wrt. money!

> when they talk about this stuff.

Again, people might say that they have a discontinuous utility function, but talk is cheap. Real economists (TM) measure utilities through examining a consumer's revealed preferences because what people say doesn't always reflect what people do.

Re: How to increase your luck surface area (2010)

#126

Post by stouset »

rubicon33 wrote: post #120
stouset wrote: post #54

Earlier quoted context omitted.

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery. The bigger problem is that this is rarely just a one-time decision to gamble. And repeatedly doing this is statistically pretty certain to lose you significant amounts of money—particularly when compare…

> The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return profits from the market to customers of all wealth ranges. This is true but unfortunately it's one of those situations where you need money to make money and even then it's a slow multi-decade long process. Culturally young people find themselves in something of…

Absolutely.

4% inflation-adjusted returns aren’t going to turn a single contribution of $1,000 into $1,000,000 in anyone’s lifetime. We have a massive economic problem where the young and the economically disadvantaged face massive challenges achieving financial security. And without the spare funds to contribute non-trivial amounts regularly (and the financial education to buy-and-hold through thick and thin), even somewhere like Vanguard isn’t going to wildly change people’s fortunes.

I don’t know what the answer is (although I have some educated guesses) but what I know doesn’t really help is glorifying a gambling regime where one in millions gets filthy rich, one in tens of thousands gets kind of rich, one in hundreds does maybe a little better than the market, and everyone else is effectively donating what little they do have to the Wall Street elite.

Re: How to increase your luck surface area (2010)

#127

Post by Judgmentality »

stouset wrote: post #124
Judgmentality wrote: post #97

Earlier quoted context omitted.

> Billionaires can remain solvent longer than you can remain irrational. Melvin Capital has a very real chance of going insolvent. Also have you heard of Lehman Brothers? Hell, just watching Cramer get upset is enough for me to realize the rich aren't happy with what's happening. It seems pretty obvious they're worried. Why else would they pay for ads claiming to have closed a position for which they supposedly no lo…

> Melvin Capital has a very real chance of going insolvent I just don’t know how many more times I’m going to have to say that Melvin is going to lose everything. Melvin and WSB are not the only two players in the market. > Also you're completely missing the point. Do you not even understand most of these people aren't trying to make money? If you don't understand that, then you don't even have a basis to start the c…

> I just don’t know how many more times I’m going to have to say that Melvin is going to lose everything.

Well, it just contradicts your previous point:

> Billionaires can remain solvent longer than you can remain irrational.

Anyway, we're obvious not agreeing. That's fine. I wish you luck as well!

Re: How to increase your luck surface area (2010)

#128

Post by Invictus0 »

alfiedotwtf wrote: post #99
Invictus0 wrote: post #18

There is no such thing as being lucky. It is just a matter of perspective. Luck is what happens when people spontaneously feel grateful.

I think from your comment, you didn't the article

You would be wrong, please assume good faith per the HN guidelines.

Re: How to increase your luck surface area (2010)

#129

Post by throwaway2245 »

stouset wrote: post #126
rubicon33 wrote: post #120

Earlier quoted context omitted.

> The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return profits from the market to customers of all wealth ranges. This is true but unfortunately it's one of those situations where you need money to make money and even then it's a slow multi-decade long process. Culturally young people find themselves in something of…

Absolutely. 4% inflation-adjusted returns aren’t going to turn a single contribution of $1,000 into $1,000,000 in anyone’s lifetime. We have a massive economic problem where the young and the economically disadvantaged face massive challenges achieving financial security. And without the spare funds to contribute non-trivial amounts regularly (and the financial education to buy-and-hold through thick and thin), even…

> the financial education to buy-and-hold through thick and thin

I find this somewhat dubious. If you buy-and-hold for a lifetime, you'll face at least a once-in-a-lifetime level of shock at some point.

The possibility that this shock will happen just when you need the funds occurs fairly regularly to generations of retirees: but always seems to be forgotten by gold-standard financial advice.

Re: How to increase your luck surface area (2010)

#130

Post by TeMPOraL »

Judgmentality wrote: post #97
stouset wrote: post #96

Earlier quoted context omitted.

> There's also orders of magnitude more money to be lost, because there's just more money on the table. And my point is that the losing side of this is inevitably going to be the majority of people long $GME. > The market can remain irrational longer than you can remain solvent. Billionaires can remain solvent longer than you can remain irrational. Again, Melvin is almost certain to lose their shirts on this. But the…

> Billionaires can remain solvent longer than you can remain irrational. Melvin Capital has a very real chance of going insolvent. Also have you heard of Lehman Brothers? Hell, just watching Cramer get upset is enough for me to realize the rich aren't happy with what's happening. It seems pretty obvious they're worried. Why else would they pay for ads claiming to have closed a position for which they supposedly no lo…

> Hell, just watching Cramer get upset is enough for me to realize the rich aren't happy with what's happening.

The "rich" are a large group. Much larger than the few names that have been on the news recently. There have been plenty of believable reports about funds that already made crapton of money on this attempted squeeze. Now, that everyone's eyes are on $GME, many more will make fortunes riding the stock down. Believe me, they are very happy about it. That kind of predictability on the market happens rarely, and is a gift for the funds.

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