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We’re discontinuing the Stablegains service

blog.stablegains.com

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Re: We’re discontinuing the Stablegains service

#211

Post by 323 »

koheripbal wrote: post #151
jmyeet wrote: post #100

What's funny about this is that I can recall discussions here and elsewhere from only a few months ago questioning the "guaranteed" super-high returns. I forget who said this but someone awhile ago said in finance said that if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk. And the Crypto Andys were all like "you just don't understand DeFi!" to whic…

What most people don't understand about finance is that there are fundamental rules that you really cannot break without consequences. Anyone who has studied quantitative finance knows that it is a HARD science. I worked with a Nobel prize winner in economics, and the math dominated. There was no politics, no opinions, no ethics involved. It really is a science. Most social media characterize finance as some ethical…

> It really is a science.

Physics is a science. Math is. Or Biology. Finance is not. Because it deals with the madness of crowds.

> Recipe for Disaster: The Formula That Killed Wall Street

> And Li's Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees.

> Nassim Nicholas Taleb is particularly harsh when it comes to the copula. "People got very excited about the Gaussian copula because of its mathematical elegance, but the thing never worked," he says. "Co-association between securities is not measurable using correlation," because past history can never prepare you for that one day when everything goes south. "Anything that relies on correlation is charlatanism."

https://www.wired.com/2009/02/wp-quant/

Re: We’re discontinuing the Stablegains service

#213

Post by simonh »

downandout wrote: post #187
jmyeet wrote: post #100

What's funny about this is that I can recall discussions here and elsewhere from only a few months ago questioning the "guaranteed" super-high returns. I forget who said this but someone awhile ago said in finance said that if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk. And the Crypto Andys were all like "you just don't understand DeFi!" to whic…

And the Crypto Andys were all like "you just don't understand DeFi!" to which the retort is "No, you just don't understand finance". If you believe the statement "if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk" it might be true that you don't understand DeFi to some degree. DeFi isn't a single market, it's millions of micro markets that are acces…

> it's quite easy to find pockets of above-average returns if you're smart…

Right, but even then how deep are those pockets (what amount of investment can they absorb without being tapped out), how big a time window will they exist for, how will you know if those limits are being reached, and are you really sure you can quantify all the risks?

By definition if it’s a pocket of opportunity, it’s very constrained opportunity. As soon as those constraints are breached it will suddenly stop being low risk and might collapse completely. A lot of people have lost a lot of money on sure fire pockets of opportunity that were great when they lasted.

Re: We’re discontinuing the Stablegains service

#214

Post by hrunt »

tjs8rj wrote: post #200
state_less wrote: post #191

Earlier quoted context omitted.

If we could all get a stable (guaranteed) 15% per year, everyone would invest. But the world economy doesn’t grow at 15%.

The US economy doesn’t grow at 7% a year but that’s what the s&p is expected to do

Well, the S&P (assuming the S&P 500) doesn't represent the entire US economy, but 500 companies that represent, arguably, the "winners" of the US economy, so expecting them to grow 7% while the entire economy as a whole grows less is not unexpected.

Re: We’re discontinuing the Stablegains service

#215

Post by charcircuit »

nrmitchi wrote: post #96
nrmitchi wrote: post #34

> While we have informed users that there are no absolute guarantees against risks I'm... uh.... fairly certain this was not the crux of their marketing which severly downplayed the underlying risk. There is also a huge spectrum between "we cannot guarantee that there is 0 risk" (which seems to be what the above sentence is saying), and "there exists a risk that all of your funds disappears in 24 hours". It seems lik…

Further little notes from their documentation that, lets just say, "downplay the risk": - "You will not lose your funds because all loans are 100% asset-backed." ( https://stablegains.zendesk.com/hc/en-us/articles/4402680425... ) - "Regardless if crypto markets are soaring or crashing, the value of assets under our management remains stable." ( https://stablegains.zendesk.com/hc/en-us/articles/4402687671... ) It's ki…

The statements are kind of true if treat funds as the UST in your account. While the UST has remained safe, the value of UST hasn't.

Re: We’re discontinuing the Stablegains service

#216

Post by sillysaurusx »

JumpCrisscross wrote: post #196
sillysaurusx wrote: post #164

Earlier quoted context omitted.

Take it from someone who lost his father’s money (all $11,000 of it) in 2014: it’s easier to just get over it as quickly as possible. None of this will amount to anything, and you’ll feel awful until you give up. Then the healing can begin. On the other hand, I’m not sure if I was mentally capable of hearing this advice back then, so… But it’s true. It’s 2022 now. That’s almost a decade ago. In fact I forget when exa…

> it’s easier to just get over it as quickly as possible. None of this will amount to anything, and you’ll feel awful until you give up You don't write to your A. G. to get your money back. (You won't.) You do as an act of civic service. These people will defraud again. Their investors will back people who will defraud again. Putting people in jail doesn't get anyone's money back. But it deters the next fraud. Write…

I guess. Just as long as you really embrace the “move on” part.

It was a mistake I made, so I’m just hoping to help people realize that things get so much easier when you stop caring.

Re: We’re discontinuing the Stablegains service

#217

Post by majormajor »

hrunt wrote: post #214
tjs8rj wrote: post #200

Earlier quoted context omitted.

The US economy doesn’t grow at 7% a year but that’s what the s&p is expected to do

Well, the S&P (assuming the S&P 500) doesn't represent the entire US economy, but 500 companies that represent, arguably, the "winners" of the US economy, so expecting them to grow 7% while the entire economy as a whole grows less is not unexpected.

How much of that is inflation? If, historically, GDP growth is about 3% and inflation is about 3%, and you're trying to invest in the strongest companies, is that how you get to 7%+?

Re: We’re discontinuing the Stablegains service

#218

Post by majormajor »

downandout wrote: post #187
jmyeet wrote: post #100

What's funny about this is that I can recall discussions here and elsewhere from only a few months ago questioning the "guaranteed" super-high returns. I forget who said this but someone awhile ago said in finance said that if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk. And the Crypto Andys were all like "you just don't understand DeFi!" to whic…

And the Crypto Andys were all like "you just don't understand DeFi!" to which the retort is "No, you just don't understand finance". If you believe the statement "if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk" it might be true that you don't understand DeFi to some degree. DeFi isn't a single market, it's millions of micro markets that are acces…

A market where, with work, you can "find pockets of above-average returns if you're smart" is MILES away from one where companies are "promising you consistent above-market returns"

Re: We’re discontinuing the Stablegains service

#219

Post by dubswithus »

gabereiser wrote: post #179
risyachka wrote: post #111

Earlier quoted context omitted.

Crypto is a tool. Is it often used for scam? Yes. But so is email. Just like stocks can fall 99% in a day. It stock s cam? No. The problem is that users dive into it without understanding the risks. Also, there should be (and will be) more regulations around it. But it is as far from the scam as it gets.

If I buy a share of a company, I own it. Buy enough of it, I can control it. Same can not be said for crypto. If I buy a token of BTC it guarantees me no voting rights, no shareholder rights, no FDIC insurance, no insurance whatsoever. When comparing investment instruments, crypto is the worst of all of them, including timeshares.

Aren't most people pretty powerless when it comes to their investments? I can't think of any investments I've ever owned where I felt I had any power.

Re: We’re discontinuing the Stablegains service

#220

Post by JumpCrisscross »

323 wrote: post #211
koheripbal wrote: post #151

Earlier quoted context omitted.

What most people don't understand about finance is that there are fundamental rules that you really cannot break without consequences. Anyone who has studied quantitative finance knows that it is a HARD science. I worked with a Nobel prize winner in economics, and the math dominated. There was no politics, no opinions, no ethics involved. It really is a science. Most social media characterize finance as some ethical…

> It really is a science. Physics is a science. Math is. Or Biology. Finance is not. Because it deals with the madness of crowds. > Recipe for Disaster: The Formula That Killed Wall Street > And Li's Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees. > Nassim Nicholas Taleb is particularly harsh when it comes to the…

> Physics is a science. Math is. Or Biology. Finance is not. Because it deals with the madness of crowds.

If you follow the scientific method, it's science. If you write an observational essay, it's not. You can build theories around falsifiable, replicable experiments pertaining to the madness of crowds. The error bars are longer. But they are not infinite.

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