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Yes. This is like debating a rational knowledgeable opponent as opposed to debating an irrational unknowledgeable opponent. You really need to be prepared for b

Yes. This is like debating a rational knowledgeable opponent as opposed to debating an irrational unknowledgeable opponent. You really need to be prepared for both. The one is more like vetting. The other is more like selling. I think investors especially want an answer to the irrational because frankly, the rational knowledgable argument is hard to understand. That gets worse the deeper into a bubble we get. Did I just say that investors are not rational? Yes, I just said that investors are not rational. I'm not a believer in the Efficient Market Hypothesis: https://en.wikipedia.org/wiki/Efficient-market_hypothesis https://en.wikipedia.org/wiki/Efficient-market_hypothesis

barry-cotter 10y ago
You misunderstand the EMH. It doesn't say that the average investor is rational. In its weak form it says that it's very, very hard to beat the market. Imagine you are an average VC. You lose money. You lose money because the market means Sequoia and other top tier firms get first refusal on all the best deals. Also you are overwhelmingly likely to be a fairly useless investor. If you are a great investor you can set up a top tier VC fund based on your own investing history. See Andreesen Horowitz. Likewise in the stock market, bond market, every market but the process happens faster the more open, transparent and liquid it is. If you can achieve a 30% year on year return people will happily lend you money or invest with you. Most people are just lucky or their advantage disappears at some point. But some people really are just that good and they either reach a size where they can't get above average returns any more because their strategy doesn't work at that scale, Apple, Berkshire Hathaway or they deliberately stay smaller than they could be to keep their money spigot working, Renaissance, Citadel.

barry-cotter 10y ago

You misunderstand the EMH. It doesn't say that the average investor is rational. In its weak form it says that it's very, very hard to beat the market. Imagine you are an average VC. You lose money. You lose money because the market means Sequoia and other top tier firms get first refusal on all the best deals. Also you are overwhelmingly likely to be a fairly useless investor. If you are a great investor you can set up a top tier VC fund based on your own investing history. See Andreesen Horowitz. Likewise in the stock market, bond market, every market but the process happens faster the more open, transparent and liquid it is. If you can achieve a 30% year on year return people will happily lend you money or invest with you. Most people are just lucky or their advantage disappears at some point. But some people really are just that good and they either reach a size where they can't get above average returns any more because their strategy doesn't work at that scale, Apple, Berkshire Hathaway or they deliberately stay smaller than they could be to keep their money spigot working, Renaissance, Citadel.