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TerraUSD crash led to vanished savings, shattered dreams

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Re: TerraUSD crash led to vanished savings, shattered dreams

#141

Post by readthenotes1 »

gruez wrote: post #102
KMag wrote: post #56

Earlier quoted context omitted.

In my experience, it seems that a lot of people have an un-stated gut feeling that "doing something" must out-perform passive dollar cost averaging a broad low-fee index ETF. If we came up with some obfuscated mathematical dance that, if un-obfuscated, were obviously dollar cost averaging in a broad-based low-fee index ETF, I think it would be more popular. Edit: There are also lots of investment strategies where peo…

>Edit: There are also lots of investment strategies where people are short tail-risk and don't realize it or properly account for it. For instance, my dad is a pretty smart guy (practicing medical doctor who never got his undergrad degree because he crushed the MCATs and got into med school after 3 years of undergrad, back in the 1970s when med school was less competitive) but he's convinced that his gut-feeling cove…

Less competitive? I know a doctor who got his MD in 1952 as a 21 year old (18 months college), another who got it in the 70s as a 24 year (3 years college), and 2 who just graduated this year at 26 and 29 (4 years college each).

Listening to the stories, med school got progressively easier (1950: tons of WW2 vets on GI bill--older and deadly serious, only 1/3 made it through. 1970s: 2/3 made it through, most dropped first year. 2018: 95% made it through because the schools radically changed from weeding out to hyper-supportive)

Re: TerraUSD crash led to vanished savings, shattered dreams

#142

Post by junofan »

KMag wrote: post #114
dustyharddrive wrote: post #37

Earlier quoted context omitted.

It’s worth mentioning USDC (Circle) reserves have never been audited, and they don’t even claim to hold dollars anymore ( https://archive.today/2021.07.12-223553/https://www.ft.com/c... ): > Until March 2020, the attestations said USDC was backed by dollars, held in government-backed US depository institutions. After that, they said the reserves were held at institutions and in “approved investments”, but did not giv…

The thing I never understood was why they didn't just invest in treasuries. Yield on the US 10-year is currently north of 3.3%, closer to 2% for a while. That's under inflation, but if you're a small start-up holding 100s of millions or billions of other people's money, that's enough to hit screw-it money in a few years without the constant fear of things going terribly wrong.

They claim most of it’s in T-bills.

Re: TerraUSD crash led to vanished savings, shattered dreams

#143

Post by UkrainianJew »

jmyeet wrote: post #31

I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king. Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this: Put your money in a broad index fund and don't look at it for 10 years. In giving this advice you start to realize it's not what people want to hear. It's not that…

>Put your money in a broad index fund and don't look at it for 10 years.

That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing.

Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that the geopolitical shock has disrupted the endless stream of cheap stuff made elsewhere, turns out there's an abundance of dollars and shortage of everything else. There might be a rather non-trivial correction ahead of us.

Re: TerraUSD crash led to vanished savings, shattered dreams

#144

Post by effingwewt »

charlie0 wrote: post #121

Coming from relative poverty, I can say that, counterintuitively, a lot of people way down on the socioeconomic ladder would rather gamble on a moonshot to riches rather than invest in an index fund. One large part of this is simply lack of education. The other part is the realization that if making close to minimum wage, investing in an index fund would still take quite a very long time to go up significantly. Give…

Too true. This is why lottery tickets are called 'poor people savings'.

It's especially bad in Mexican communities. I've seen so many buy them, scratch them at the counter, and go back for more. Sometimes they don't even play the 'game' they just scratch the barcode and scan them.

No method, just hope. You can see the fever in the eyes sometimes, no different than casino slot pullers, or a drug addict getting a fix.

Some of my family members (on the mexican side) spend insane amounts, $20/card and lost constantly. Easily spending thousands but all they seem to remember are the times they won $20-200.

I've thought about this a lot, and think a better idea would be for people to pool money together, and using a program to choose several winners a day. once you've won you can't again for X days. once you've paid so much without a win you're guaranteed $x or something.

I think it's along the lines of what insurance was supposed to be in theory. Without admin costs and some random people leeching money from the top (C-suites) maybe it'd work better.

Re: TerraUSD crash led to vanished savings, shattered dreams

#145

Post by bmitc »

UkrainianJew wrote: post #143
jmyeet wrote: post #31

I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king. Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this: Put your money in a broad index fund and don't look at it for 10 years. In giving this advice you start to realize it's not what people want to hear. It's not that…

>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing. Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that t…

What do you suggest?

Re: TerraUSD crash led to vanished savings, shattered dreams

#146

Post by jliptzin »

UkrainianJew wrote: post #143
jmyeet wrote: post #31

I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king. Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this: Put your money in a broad index fund and don't look at it for 10 years. In giving this advice you start to realize it's not what people want to hear. It's not that…

>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing. Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that t…

There have been a ton of real technological advances since 2008 that is not just on paper. You could have also said the exact same thing in 2000.

Re: TerraUSD crash led to vanished savings, shattered dreams

#147

Post by KMag »

rurp wrote: post #79
KMag wrote: post #56

Earlier quoted context omitted.

In my experience, it seems that a lot of people have an un-stated gut feeling that "doing something" must out-perform passive dollar cost averaging a broad low-fee index ETF. If we came up with some obfuscated mathematical dance that, if un-obfuscated, were obviously dollar cost averaging in a broad-based low-fee index ETF, I think it would be more popular. Edit: There are also lots of investment strategies where peo…

Heh, I think that idea has a lot of promise. Casinos might offer some guidance here given how good they are at making games with fairly straightforward negative odds seem enticing. We need some sort of responsible investing vehicle that includes gamification, intermittent reinforcement, and a tiny chance for a huge payoff.

I think perhaps micro-managing layered limit orders to try to squeeze the last penny out of multi-kilobuck index ETF purchases might be the right way to gamify responsible investing, though that does have the danger of soaking up hours during the workday, so there are negative consequences.

Maybe they way to go is lump-sum investing into some bond ETFs with gamified rebalancing into an age-appropriate mix of bond ETFs and broad equity index ETFs, following some pattern similar to value averaging for the rebalance, rather than cost averaging. It shouldn't actually be too hard to get something that has the right balance of feeling like real work, being relatively difficult to screw up (or the most common errors having little long-term effect), and out-performing dollar cost averaging.

This isn't investment advice, and even if it were, you shouldn't take investment advice from internet randos.

Re: TerraUSD crash led to vanished savings, shattered dreams

#148

Post by effingwewt »

Drblessing wrote: post #52

Let's not forget that 10 years ago the largest banks all failed. [1] [1] https://www.investopedia.com/articles/economics/09/financial... .

And many of us thought they should have been allowed to fail. Profits privatized, losses socialized.

Banks are far from innocent, but let's not forget that crypto has been almost all scams (Im giving thr benefit of the doubt that there may be a legit one out there somewhere).

They wanted decentralized, unregulated finance until the shit hit the proverbial fan.

People invested for insane returns and were surprised pikachu face that they could possibly lose money.

I've still got friends right now screaming 'get in while it's cheap!'

edit to add- this is becoming the hot potato many of us saw Wallstreet pull before.

who is gonna hold it when the music ends?

Re: TerraUSD crash led to vanished savings, shattered dreams

#149

Post by UkrainianJew »

bmitc wrote: post #145
UkrainianJew wrote: post #143

Earlier quoted context omitted.

>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing. Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that t…

What do you suggest?

Bonds might become a thing again with the interest rates above 3%.

Re: TerraUSD crash led to vanished savings, shattered dreams

#150

Post by hsbauauvhabzb »

readthenotes1 wrote: post #141
gruez wrote: post #102

Earlier quoted context omitted.

>Edit: There are also lots of investment strategies where people are short tail-risk and don't realize it or properly account for it. For instance, my dad is a pretty smart guy (practicing medical doctor who never got his undergrad degree because he crushed the MCATs and got into med school after 3 years of undergrad, back in the 1970s when med school was less competitive) but he's convinced that his gut-feeling cove…

Less competitive? I know a doctor who got his MD in 1952 as a 21 year old (18 months college), another who got it in the 70s as a 24 year (3 years college), and 2 who just graduated this year at 26 and 29 (4 years college each). Listening to the stories, med school got progressively easier (1950: tons of WW2 vets on GI bill--older and deadly serious, only 1/3 made it through. 1970s: 2/3 made it through, most dropped…

Is ‘Hyper supportive’ a synonym for ‘universities realized they could make more money by making things easier’?
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