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

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

#31

Post by freetime2 »

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.

Roaring Kitty’s posts that kicked off the GME craze had some very thoughtful analysis. And recently I watched some videos about dividend investing on YouTube that I would consider reasonable investment advice.

I agree that there is a lot of gambling and excessive risk taking going on. And I myself stick to a 3 ETF portfolio because I like the simplicity. But to call it almost entirely just gambling I think is missing the point. There is some interesting and good stuff happening now in the intersection of social media and low cost trading, and it makes sense I think for VCs to be investing in that space.

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

#32

Post by vinceguidry »

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?

The wild swings only affect the meme stocks. Just stay away from those and you'll be fine. "The market" is a lot bigger than one group of gamblers can affect.

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

#33

Post by yoz-y »

ericjang wrote: post #15
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 b…

Please correct me if I’m wrong. But I assume that earning while holding is based on an assumption that the overall productivity continues to rise, while active trading is more of a zero sum game. Any gains you earn is somebody’s loss.

Now, the initial assumption could very well hit a wall.

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

#34

Post by duxup »

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…

How many folks are out there as active traders? I'm not sure how big en masse really is here.

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

#35

Post by CarelessExpert »

thrav wrote: post #29
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…

While you’re right about the majority, there are pockets of young people partaking in sophisticated strategies, and doing quite well. The people in the discord server that I belong to are all using stops to max their downside and get out quick if their instinct proves wrong. After several months on paternity leave, it became clear that greatest barriers to active trading are money and time, like most things. If you’r…

> there are pockets of young people partaking in sophisticated strategies, and doing quite well.

If we could I'd make a 20 year wager that every one of those people will fail to beat the market in the long run.

It's very easy to make money on "sophisticated strategies" during an historic 10 year bull run.

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

#36

Post by [deleted] »

justicezyx wrote: post #25
baobabKoodaa wrote: post #10

Earlier quoted context omitted.

> 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. This claim is false. Some funds have overperformed year after year with high margins and (relatively) low risk, for decades. For example, Renaissance Technologies' Medallion Fund and Warren…

You are using individual instances to disapprove statistical observation? Ate you seeing the contradiction here? ...

[deleted]

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

#38

Post by baq »

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.

except it isn't: if enough gamblers stick to one ticker, they can break the market. options aren't roulette and stocks aren't blackjack. casinos don't have this failure mode.

gamestop was the example of what happens in the limit - only the DTCC prevented a global financial crisis as a circuit breaker of last resort.

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

#39

Post by nceqs3 »

scarmig wrote: post #21
baobabKoodaa wrote: post #10

Earlier quoted context omitted.

> 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. This claim is false. Some funds have overperformed year after year with high margins and (relatively) low risk, for decades. For example, Renaissance Technologies' Medallion Fund and Warren…

2020, Renaissance funds' performance: Closed to outsiders: Medallion, +76% Open to outsiders: RIEF, -23% RIDA, -34%

You forgot to mention that the external funds have performed exceedly well (20+%/year) over the past 15 years even after a 44% performance fee.

Also the external funds are different strategies than Medallion.

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

#40

Post by centimeter »

nceqs3 wrote: post #20
andi999 wrote: post #5

Earlier quoted context omitted.

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.

> Jane Street isn't that successful.

Their historical record is very good.

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