41–50 of 116 posts
Earlier quoted context omitted.
What’s the difference between the dead person strategy and an index fund? The dead strategy involves whatever stocks they had selected at the time?
The dead person can't make bad decisions on when to buy/sell the index fund. Those "bad" decisions don't even require an attempt to time the market, if e.g. you always invest whatever's left over after ~fixed living expenses, and you get paid more when the market's higher.
It's my understanding that, if commissions are free (e.g. Robinhood) then on average, any trading strategy is going to perform comparable to the market average. If you can find any reliably bad strategy (in a fee-less market), then you have necessarily found an outperforming strategy that is the opposite.
Eh, if I wanted bankrupt a trading account by playing a reliably bad strategy, I'd buy deep out-of-the-money options expiring this Friday. The expected value is $0 (neither positive nor negative), but they have only a miniscule probability of profitability.
why do people think trading will make you rich?
If markets were truly random, you might expect 50% of day traders to lose money, not 90%. Of course, markets are not random and most untrained humans have emotional biases that actively optimize for losing money in markets. This is likely a controversial opinion: 90% of the time, someone who wants to break out of the "rat race" or achieve wealth for some future vision should go the startup route, or if the wealth par…
Only if the humans were making decision to buy and sell randomly.
Imagine if, within the next 20 years, it becomes normal & accepted wisdom that joining a startup and taking their basically worthless 'equity' is more likely to lose you money than day trading. Just kind of an interesting juxtaposition- Hacker News, Website Devoted To Risky Startups, Decries Risky Day Trading
If markets were truly random, you might expect 50% of day traders to lose money, not 90%. Of course, markets are not random and most untrained humans have emotional biases that actively optimize for losing money in markets. This is likely a controversial opinion: 90% of the time, someone who wants to break out of the "rat race" or achieve wealth for some future vision should go the startup route, or if the wealth par…
>If markets were truly random, you might expect 50% of day traders to lose money, not 90%. Only if the humans were making decision to buy and sell randomly.
If markets were truly random, you might expect 50% of day traders to lose money, not 90%. Of course, markets are not random and most untrained humans have emotional biases that actively optimize for losing money in markets. This is likely a controversial opinion: 90% of the time, someone who wants to break out of the "rat race" or achieve wealth for some future vision should go the startup route, or if the wealth par…
This seems highly unlikely
Sure, there are people that have the skillset and capital to earn a living from day trading that don't have the skillset or interest in running a business who'll be better off trading. But successful businesses selling products or services can consistently earn very large multiples of their initial investment, and day traders can't. Short term financial bets are much closer to a zero sum game than starting businesses. And we've already established that 90% of day traders fail, just like startup businesses. More than 90% since the criteria in this study is beat the index, not earn a living.
Not in any way defending day trading, but I think it's interesting that it's become such accepted wisdom about how bad it is- here on a website dedicated to startups. 90% of day traders lose money, what are the odds for startup founders? Probably more than 90% fail, yeah? Imagine if, within the next 20 years, it becomes normal & accepted wisdom that joining a startup and taking their basically worthless 'equity' is m…
Not in any way defending day trading, but I think it's interesting that it's become such accepted wisdom about how bad it is- here on a website dedicated to startups. 90% of day traders lose money, what are the odds for startup founders? Probably more than 90% fail, yeah? Imagine if, within the next 20 years, it becomes normal & accepted wisdom that joining a startup and taking their basically worthless 'equity' is m…
How is that not obvious already?