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Summary: beginners almost never invest well. And it is the same for stocks, many people think they will make money by investing in a specific company because t

by polote 9y ago

Summary: beginners almost never invest well. And it is the same for stocks, many people think they will make money by investing in a specific company because their logic says it is good idea. Investment is a job, and to win you need experience

FLUX-YOU 9y ago
>And it is the same for stocks, many people think they will make money by investing in a specific company because their logic says it is good idea. Probably like FizzBuzz, we'd probably be shocked at the amount of people that wouldn't default to lazy-3 or an index fund based portfolio. I don't know of a good metric someone should study fundamentals before they'd be considered "ready" to invest in individual companies or options.
eru 9y ago
Depends on what kind of investment. If you want to win, but don't care how, just buy a broad index.
jacques_chester 9y ago
> Summary: beginners almost never invest well. Investing in startups is closer to betting on horse races than stuff like the S&P 500 or buying bonds. There're a lot of people who will sell you systems. There's a lot of form guides. In a booming economy more people take a flutter on the fillies. And every once a while a thoroughbred emerges that is simply unstoppable. But in general, only the bookies win. The main difference is that in horse racing you can bet on a single horse and in the course of a few races, you'll probably bet correctly and make a little scratch. In startups you can only bet the trifecta: you'll probably never hit it in your entire life, but the payoff is much higher if you do.
the_cat_kittles 9y ago
and, must like gambling, the winnings are very skewed towards the top small percentile. so, even if you know more than 90% of participants, you will probably get owned.
erikb 9y ago
This blog post is also showing, however, that it is possible to make experiences without learning much. He doesn't seem to have figured out how it works, because that part is still rather unclear in his text.

by polote 9y ago

FLUX-YOU 9y ago

>And it is the same for stocks, many people think they will make money by investing in a specific company because their logic says it is good idea. Probably like FizzBuzz, we'd probably be shocked at the amount of people that wouldn't default to lazy-3 or an index fund based portfolio. I don't know of a good metric someone should study fundamentals before they'd be considered "ready" to invest in individual companies or options.

eru 9y ago

Depends on what kind of investment. If you want to win, but don't care how, just buy a broad index.

jacques_chester 9y ago

> Summary: beginners almost never invest well. Investing in startups is closer to betting on horse races than stuff like the S&P 500 or buying bonds. There're a lot of people who will sell you systems. There's a lot of form guides. In a booming economy more people take a flutter on the fillies. And every once a while a thoroughbred emerges that is simply unstoppable. But in general, only the bookies win. The main difference is that in horse racing you can bet on a single horse and in the course of a few races, you'll probably bet correctly and make a little scratch. In startups you can only bet the trifecta: you'll probably never hit it in your entire life, but the payoff is much higher if you do.

the_cat_kittles 9y ago

and, must like gambling, the winnings are very skewed towards the top small percentile. so, even if you know more than 90% of participants, you will probably get owned.

erikb 9y ago

This blog post is also showing, however, that it is possible to make experiences without learning much. He doesn't seem to have figured out how it works, because that part is still rather unclear in his text.