Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

“Buy and Hold” No More: The Resurgence of Active Trading

a16z.com

Post reply on HN
Print view View original

11–20 of 327 posts

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#11

Post by djoldman »

andi999 wrote: post #5
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

So Jane Street and James Simons do not exist?

I think it's pretty obvious that the parent is talking about the average investor.

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#12

Post by ghaff »

andi999 wrote: post #5
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

So Jane Street and James Simons do not exist?

It probably depends how active and how sophisticated. (And how lucky.) Certainly there are large sophisticated endowments and investment funds that don't simply stick everything in an index fund and call it a day. And many do get better than S&P 500 returns. After all, you need to decide what investments to buy and hold and, presumably, make adjustments over time even if turnover is relatively low.

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#13

Post by wnevets »

andi999 wrote: post #5
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

So Jane Street and James Simons do not exist?

There's always winners of the lottery but statically it wont be you.

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#14

Post by matwood »

lupire wrote: post #3

Article misses the point (perhaps due to their capital investments) that the resurgence in active trading is almost entirely just gambling, but exempted from casino regulation. Also, saying "no more" to refer to a blip fad is a ridiculous healdit.

I do wonder if the surge will die down as everything opens back up. When the world closed down and there were no sports, there was nothing to gamble on. When RH was blowing up around GME, stats came out that many of their customers were playing around with relatively small amounts money. The amounts sounded pretty similar to what I hear people talk about throwing on a game. $25-$100 for the excitement.

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#15

Post by ericjang »

CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

"statistically proven reality" is an oxymoron - past outperformance of passive funds (statistics) are no guarantee of future returns (reality).

Some of the math surrounding the derivation of the weakest forms of EMT also relies on the assumption that everyone has access to the same information, which is patently false in the world we live in. Even retail traders sometimes have an information edge (e.g. working at a biotech company or a specialized industry like semiconductors)

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#16

Post by ghaff »

djoldman wrote: post #11
andi999 wrote: post #5

Earlier quoted context omitted.

So Jane Street and James Simons do not exist?

I think it's pretty obvious that the parent is talking about the average investor.

Yes but it's also a fair point that a lot of actively-managed mutual funds out there don't beat low-cost index funds.

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#17

Post by zitterbewegung »

nicolas_t wrote: post #9
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

As someone who is doing buy and hold and not doing any day trading, how can I protect myself from the wild swings of the market caused by active traders gambling?

Dollar cost averaging[1] which is basically you buy any security every x amount of days. This is usually how a 401k is setup where you buy a mutual fund every time you get a paycheck.

[1] https://en.wikipedia.org/wiki/Dollar_cost_averaging

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#18

Post by granshaw »

andi999 wrote: post #5
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

So Jane Street and James Simons do not exist?

Jane Street is primarily a market maker I believe, not something an individual or even a small institution can just go out and do

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#19

Post by 4TunateSon »

andi999 wrote: post #5
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

So Jane Street and James Simons do not exist?

Jane Street and RenTech are very different institutions compared to something like Vanguard or Fidelity. They aren't accessable to retail investors/traders, they have different goals, and methods.

Re: “Buy and Hold” No More: The Resurgence of Active Trading

#20

Post by nceqs3 »

andi999 wrote: post #5
CarelessExpert wrote: post #2

> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…

So Jane Street and James Simons do not exist?

1) Jane Street isn't that successful. 2) RenTech spends billions every year on compute, data and hiring the smartest people in the world.

The average person could never compete with RenTech.

Post reply on HN