121–130 of 440 posts
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Why do private investors need protection? Why can't they be held responsible for the foolishness of their actions?
What if there’s no way to know what’s foolish and what isn’t? The protection we’re talking about here is equal access to information which is a necessary prerequisite for an efficient market.
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Because with the rise of 401k and lately low interest rates a lot of people were forced into the market who simply don’t have skill or time to learn these skills to make investments in an unregulated market.
401ks are rarely self directed investments though. You can pick fund types, but rarely, if ever, could you pick stocks. The 401k is heavily regulated. And nobody is “forced into the market.”
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The vast majority of 401(k) funds are in large-cap mutual funds which don't invest in IPOs. Most 401(k) plans also offer some sort of money market or Treasury bond fund. It takes about 5 minutes and zero skill to learn that T-bonds are safe investments.
It’s not like treasuries or money market return acceptable returns for people’s retirement portfolio.
> WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses. > This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is wrong, wrong, wrong. The difference is Amazon saw what the marginal costs coul…
That's what the article says:
>At first, with companies like Walmart and Amazon, predatory pricing can seem smart. The entire retail sector might be decimated and communities across America might be harmed, but two day shipping is convenient and Walmart and Amazon do have positive cash flow. But increasingly with cheap capital and a narrow slice of financiers who want to copy the winners, there is a second or third generation of companies asking Wall Street to just ‘trust me.’
It's not that WeWork is the same as Amazon, it's that WeWork is symptomatic of a bubble caused by investors looking to copy Amazon's success without understanding why it succeeded.
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Because with the rise of 401k and lately low interest rates a lot of people were forced into the market who simply don’t have skill or time to learn these skills to make investments in an unregulated market.
Most 401ks are invsted in public companies, not private ones
Some of these criticisms are just irrelevant personal abuse - like saying he doesn't think Neumann's t-shirt is fitted well.
Defending those of poor character and moral fiber (not my judgement, facts reported) from a jab about their clothes is low priority. The other issues presented are far more pressing.
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Taking a jab at clothing generally is so low effort to be actually embarrassing and will invalidate anything else that you are trying to say. IMO.
Taking some comedic/low effort jabs should not invalidate from one's main (and valid) arguments. IMO. Else it's low effort on the listener's part.
For me, this whole WeWork fiasco has shown just how valuable the SEC and the S-1 filing process is. Let's be clear -- Neumann was fired because any investor who read the S-1 was mortified and wouldn't touch the company with a 10 foot pole. If anything, this shows how lawless the private markets are and the lack of guardrails that are present to protect private investors -- perhaps this will lead to some reform in the…
Why do private investors need protection? Why can't they be held responsible for the foolishness of their actions?
Earlier quoted context omitted.
Taking a jab at clothing generally is so low effort to be actually embarrassing and will invalidate anything else that you are trying to say. IMO.
I'm amazed that the focus is on the author calling a t-shirt "ill-fitting" instead of calling Neumann a liar and a thief. Apparently, Neumann's fashion sense is more defensible than his personal integrity.
> WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses. > This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is wrong, wrong, wrong. The difference is Amazon saw what the marginal costs coul…
> with the idea of profiting later on via the surviving monopoly I don't understand...if you undercut your competitors so you're the sole survivor, I don't see how profiting is a obvious end result. When you return prices to market value wouldn't competitors just appear again. Is predatory pricing really such a bad thing, I'd assume the market would just corrects itself later?
No, because they won't be able to raise enough capital to cover startup costs when investors know that the dominant player can just price dump long enough to starve any new company out.
Relatively unregulated capitalism works OK when the product area naturally approaches a perfect market:
- Simple easily compared products - Consumers have easy access to accurate product information - Low startup cost for producers to enter the market - No costs for consumers to switch to a different producer
Very few markets actually resemble that. In order to keep non-perfect markets functioning efficiently, it takes a lot of strong, enforced regulation.
This is increasingly true as we transition to the Information Age where products are increasingly data and services. For those, network effects are powerful, which further entrench the dominant player.
> I'd assume the market would just corrects itself later?
How? "Market" isn't magic fairy dust that spontaneously causes efficiency to appear from nowhere.