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Be careful to examine what's actually in the fund as your underlying. This isn't like buying the S&P500 where the sector exposure is well defined. One "startup

Be careful to examine what's actually in the fund as your underlying. This isn't like buying the S&P500 where the sector exposure is well defined. One "startup index fund" can perform very disparately from another "startup index fund". edit: If there's data that shows the performance of a basket of random 100 company samples being equivalent to any number of other random 100 company samples, then I am happy to admit that I am mistaken in this regard.

swanson 10y ago
Yep -- I understand what I'm buying (well, not buying yet...). Something like this would be a great for a Taleb-esque 90/10 barbell I think -- 90% in target-date vanguard funds and 10% in startup investments by proxy.
- kriro 10y ago
  Didn't Taleb advocate cash holdings (90%) and high risk investing (10%). I always though that 90% cash was a pretty whacky idea and personally just stick to portfolio theory. I think your plan (substitution index funds for cash) is already a lot better than what Taleb suggested.
- mapleoin 10y ago
  Taleb considers the stock-market at large to be extremely risky. He advocates the exact opposite of keeping 90% of your assets in the stock market.
  - swanson 10y ago
    Sorry, I wasn't clear. Taleb-esque in the sense of 90/10 (safe/risky) split, not his specific recommendation. Thanks for clarifying :)
ulkram 10y ago
central limit theorum?
- pyromine 10y ago
  Statistically the central limit theorem is assuming sampling from the same population, there is no guarantee that two startup indexes are actually sampling from the same population
- spacehome 10y ago
  The Central Limit Theorem needs the prerequisite that your distribution has a finite variance. It's not at all clear that this holds for the return of startup investments. In more practical terms, when the variance is very high or there are outsized impacts from small portions of your population, it can take arbitrarily many samples before your average starts to converge. So it's entirely possible that sampling 100 companies isn't enough.
- ptero 10y ago
  Lots of conditions that may not be satisfied. Independence is a very hard one. results may be well correlated even if they look like they should be independent

swanson 10y ago

Yep -- I understand what I'm buying (well, not buying yet...). Something like this would be a great for a Taleb-esque 90/10 barbell I think -- 90% in target-date vanguard funds and 10% in startup investments by proxy.

kriro 10y ago
Didn't Taleb advocate cash holdings (90%) and high risk investing (10%). I always though that 90% cash was a pretty whacky idea and personally just stick to portfolio theory. I think your plan (substitution index funds for cash) is already a lot better than what Taleb suggested.
mapleoin 10y ago
Taleb considers the stock-market at large to be extremely risky. He advocates the exact opposite of keeping 90% of your assets in the stock market.
- swanson 10y ago
  Sorry, I wasn't clear. Taleb-esque in the sense of 90/10 (safe/risky) split, not his specific recommendation. Thanks for clarifying :)

ulkram 10y ago

central limit theorum?

pyromine 10y ago
Statistically the central limit theorem is assuming sampling from the same population, there is no guarantee that two startup indexes are actually sampling from the same population
spacehome 10y ago
The Central Limit Theorem needs the prerequisite that your distribution has a finite variance. It's not at all clear that this holds for the return of startup investments. In more practical terms, when the variance is very high or there are outsized impacts from small portions of your population, it can take arbitrarily many samples before your average starts to converge. So it's entirely possible that sampling 100 companies isn't enough.
ptero 10y ago
Lots of conditions that may not be satisfied. Independence is a very hard one. results may be well correlated even if they look like they should be independent