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Well, you've always got insiders in the sense that most people know their own industry better than they know other industries. Passive funds are great when you
by Taek 10y ago
Well, you've always got insiders in the sense that most people know their own industry better than they know other industries. Passive funds are great when you want to diversify or lack knowledge.
But for example I've got a ton of money in cryptocurrency right now, it's my field and I've got way better-than-average knowledge about some of the coins. This helps me make informed investments, and I've been able to beat the passive rate by doing high risk investing into assets that were obviously priced incorrectly.
I'm not a day trader. I'm like the guy who goes about his way normally, but isn't afraid to pick up $20 off the ground when I see it. I spend some time looking for it, but it's not where I put most of my energy.
- devilsavocado 10y agoCan you expand on how having better-than-average knowledge about some crypto currencies allows you to make money investing in them? I doubt you mean that you actually have knowledge of when and how the price is going to change. Are you just betting on a general increase in value, or doing some form of pairs trading or arbitrage? How comfortable are you with rapid 30% price swings?
- Taek 10y agoI'm very comfortable with rapid price swings. My strategy is to buy when they are silly underpriced and wait. They may drop further but almost always if there's a good dev team it'll jump when they have big enough news. So you just wait. I've yet to be bold enough to short something overpriced but there are plenty of cases where something has struck me as obviously overpriced and within a year the price has corrected. Game plan definitely involves waiting months at a time.