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

#1

Post by cristiandima » Sat, Apr 10, 2021, 6:54 PM UTC

“Buy and Hold” No More: The Resurgence of Active Trading
a16z.com

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

#2

Post by CarelessExpert » Sat, Apr 10, 2021, 7:39 PM UTC

> 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 like it burned penny stock traders in the 80s and Internet stock traders in the late 90s.

The reality is Gen Z'ers are desperate at this point and they're turning to gambling in the hopes of making up lost economic ground. And if that happens en masse, it's not gonna be pretty.

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

#3

Post by lupire » Sat, Apr 10, 2021, 7:41 PM UTC

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.

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

#4

Post by Scoundreller » Sat, Apr 10, 2021, 7:43 PM UTC

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.

... and with much lower commissions than betting on horse/footballer/dog races.

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

#5

Post by andi999 » Sat, Apr 10, 2021, 7:46 PM UTC

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?

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

#6

Post by playingchanges » Sat, Apr 10, 2021, 7:46 PM UTC

Tell that to all the active managers who bailed last spring instead of holding their tech stocks lol.

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

#7

Post by bezout » Sat, Apr 10, 2021, 7:46 PM UTC

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…

I’m not arguing the opposite, but I’m very interested in learning more about this. Can you suggest some references?

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

#8

Post by bitexploder » Sat, Apr 10, 2021, 7:47 PM UTC

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…

It will just make buy and hold that much more beneficial.

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

#9

Post by nicolas_t » Sat, Apr 10, 2021, 7:51 PM UTC

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?

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

#10

Post by baobabKoodaa » Sat, Apr 10, 2021, 7:51 PM UTC

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…

> 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 Buffett's Berkshire Hathaway. Please show me the "statistically proven reality" that explains these returns.