6 ms·

You have great advice with the benefit of hindsight. So what's your suggestion for the "obvious" investment today?

Spooky23 9y ago
Look at sectors that benefit from the political environment. Things like pharmaceuticals with ok pipelines, good companies in shitty sectors (say a company like Costco in retail), health insurers and companies like McDonald's that do well when the rest of the world does not. Think about smaller players who benefit from net neutrality going away. You should have a running list of good companies and invest as you see corrections or downturns.
- mdorazio 9y ago
  This is not at all like what the parent post implied. You're basically saying to pick sectors/companies that will net a slightly better than market rate of return on average. Which is great. However, this is very far from a 10000x return on true outliers, long shots, and market bubbles.
  - vostok 9y ago
    Not that it matters, but 100000% is 1000x. This isn't investment advice. I think the idea is that you'll have some investments that yield 1000x and some that yield 0x so you'll average out to something that's better than the market, but not 1000x.
    - mdorazio 9y ago
      I agree. However, the original question was more like, "if it's easy to see what will yield a huge return, what should I invest in today to get that return?" To me, it's pretty clear that investments yielding huge returns are only obvious in hindsight, and even an astute tech-savvy investor will, on average, only do slightly better than a normal diversified portfolio.
      - Spooky23 9y ago
        Those two statements don’t jive. It’s not impossible to trade hours for a return significantly better than a normal diversified portfolio, but less than being an early bitcoin miner.
        mdorazio 9y ago
        No, but it is unlikely. Hence the "average" part. Also, if we're talking about trading hours we're effectively talking about working rather than investing. Of course you can make more than a market return if you spend your free time consulting on the side, for example, but that's not really comparable to spending 5 minutes buying bitcoin or Tesla stock in 2011.
        eldavido 9y ago
        It's important to realize the global macro environment is pushing up prices of everything: houses, stocks, just, all of it. I'll admit I'm surprised by Bitcoin, I actively avoided it thinking it would crash long before now. But I wouldn't treat the past five years as anything remotely "normal". We're in one of the longest bull markets the US has ever seen and there are a lot of macro forces that will eventually end it, e.g. boomer retirement, student loan debt overhang, pension obligations. I was just reading some of Dalio's daily observations on some of this, they're quite good.
  - Spooky23 9y ago
    I think he was taking some license. Knowing your shit and having liquid cash is key to those opportunities. My play portfolio made a 10x return after the financial crisis because of knowing key sectors and having cash. Likewise, I had a nice bitcoin hit that could have been a 1000x play, but to be honest I got out to buy a car, which in retrospect was a very dumb decision!
    - sjg007 9y ago
      Reminds me of the HN guy who sold his sun stock to by a car..
      - Procrastes 9y ago
        By the time I had Sun stock, I would have had to pay someone to take it. Still loved working there. I cashed out a bunch of bitcoin for what I thought was going to be a near peak price at the time, $800. Fortunately, I never agree with myself completely, so I saved a few for the long run. Thinking back, I can't really say I would do anything differently with the information I had at the time.
- TimPC 9y ago
  Your instincts about pharma may be badly wrong. Many hackers are shocked that pharma stocks generally go up when they downsize in research -- it seems wrong to our builder instinct but it makes sense in terms of short-term opportunity.
3pt14159 9y ago
I've been commenting on here for almost 10 years. I've been wrong sometimes, but I've called a lot right (from Tesla, Apple, Facebook, Bitcoin, AI). Next decade is going to be cyber security and a word that I doesn't exist yet that I think of as "personification" of the internet. Combination of webs of trust and machine learning to both shape tastes and politics and harden networks from their shaping. Also, I think there is a pretty good chance that biology takes off, starting with GATACA or something like it for dogs. People want old scratch to live forever and not get hip dysplasia, and once old doggo is doing fine with Gene Drive then we're not going to be far off. Also, people are much more comfortable thinking with graphs of data. Think about tying together graphs that we can use to make predictions and watch companies like meta.com (bought by Zuck, that guy is a genius) and researchgate.net. Also get ready for mass protests and "eat the rich" politics. Especially in America where the poor are poorly educated and the political system is corrupt enough to be evil enough to not support the poor, but not corrupt enough to collapse the private sector.
- beambot 9y ago
  So... Which investments specifically?
- blahshaw 9y ago
  I think cyber security is going to be huge too, but not sure how to make a play on it, don't see any obvious winners in the security space. What approach do you take?
  - 3pt14159 9y ago
    If you're not in the position to angel invest I don't have anything top of mind to share. I think most of the stock market is overpriced, but Facebook is still probably a reasonable bet. If I knew the next Bitcoin I'd definitely have typed it out. Sometimes the answer is to just wait and see and let your thoughts kinda work through things. What I know for sure is that there are a lot of powerful people that found out how important cyber security is in the past couple years. Snowden, Clinton, Paradise Papers. The market will do its best to try to meet this need.
whataretensors 9y ago
Invest in self driving startups. Oh wait you can't, thanks SEC.

Look at sectors that benefit from the political environment. Things like pharmaceuticals with ok pipelines, good companies in shitty sectors (say a company like Costco in retail), health insurers and companies like McDonald's that do well when the rest of the world does not. Think about smaller players who benefit from net neutrality going away. You should have a running list of good companies and invest as you see corrections or downturns.

mdorazio 9y ago
This is not at all like what the parent post implied. You're basically saying to pick sectors/companies that will net a slightly better than market rate of return on average. Which is great. However, this is very far from a 10000x return on true outliers, long shots, and market bubbles.
- vostok 9y ago
  Not that it matters, but 100000% is 1000x. This isn't investment advice. I think the idea is that you'll have some investments that yield 1000x and some that yield 0x so you'll average out to something that's better than the market, but not 1000x.
  - mdorazio 9y ago
    I agree. However, the original question was more like, "if it's easy to see what will yield a huge return, what should I invest in today to get that return?" To me, it's pretty clear that investments yielding huge returns are only obvious in hindsight, and even an astute tech-savvy investor will, on average, only do slightly better than a normal diversified portfolio.
    - Spooky23 9y ago
      Those two statements don’t jive. It’s not impossible to trade hours for a return significantly better than a normal diversified portfolio, but less than being an early bitcoin miner.
      - mdorazio 9y ago
        No, but it is unlikely. Hence the "average" part. Also, if we're talking about trading hours we're effectively talking about working rather than investing. Of course you can make more than a market return if you spend your free time consulting on the side, for example, but that's not really comparable to spending 5 minutes buying bitcoin or Tesla stock in 2011.
      - eldavido 9y ago
        It's important to realize the global macro environment is pushing up prices of everything: houses, stocks, just, all of it. I'll admit I'm surprised by Bitcoin, I actively avoided it thinking it would crash long before now. But I wouldn't treat the past five years as anything remotely "normal". We're in one of the longest bull markets the US has ever seen and there are a lot of macro forces that will eventually end it, e.g. boomer retirement, student loan debt overhang, pension obligations. I was just reading some of Dalio's daily observations on some of this, they're quite good.
- Spooky23 9y ago
  I think he was taking some license. Knowing your shit and having liquid cash is key to those opportunities. My play portfolio made a 10x return after the financial crisis because of knowing key sectors and having cash. Likewise, I had a nice bitcoin hit that could have been a 1000x play, but to be honest I got out to buy a car, which in retrospect was a very dumb decision!
  - sjg007 9y ago
    Reminds me of the HN guy who sold his sun stock to by a car..
    - Procrastes 9y ago
      By the time I had Sun stock, I would have had to pay someone to take it. Still loved working there. I cashed out a bunch of bitcoin for what I thought was going to be a near peak price at the time, $800. Fortunately, I never agree with myself completely, so I saved a few for the long run. Thinking back, I can't really say I would do anything differently with the information I had at the time.
TimPC 9y ago
Your instincts about pharma may be badly wrong. Many hackers are shocked that pharma stocks generally go up when they downsize in research -- it seems wrong to our builder instinct but it makes sense in terms of short-term opportunity.

3pt14159 9y ago

I've been commenting on here for almost 10 years. I've been wrong sometimes, but I've called a lot right (from Tesla, Apple, Facebook, Bitcoin, AI). Next decade is going to be cyber security and a word that I doesn't exist yet that I think of as "personification" of the internet. Combination of webs of trust and machine learning to both shape tastes and politics and harden networks from their shaping. Also, I think there is a pretty good chance that biology takes off, starting with GATACA or something like it for dogs. People want old scratch to live forever and not get hip dysplasia, and once old doggo is doing fine with Gene Drive then we're not going to be far off. Also, people are much more comfortable thinking with graphs of data. Think about tying together graphs that we can use to make predictions and watch companies like meta.com (bought by Zuck, that guy is a genius) and researchgate.net. Also get ready for mass protests and "eat the rich" politics. Especially in America where the poor are poorly educated and the political system is corrupt enough to be evil enough to not support the poor, but not corrupt enough to collapse the private sector.

beambot 9y ago
So... Which investments specifically?
blahshaw 9y ago
I think cyber security is going to be huge too, but not sure how to make a play on it, don't see any obvious winners in the security space. What approach do you take?
- 3pt14159 9y ago
  If you're not in the position to angel invest I don't have anything top of mind to share. I think most of the stock market is overpriced, but Facebook is still probably a reasonable bet. If I knew the next Bitcoin I'd definitely have typed it out. Sometimes the answer is to just wait and see and let your thoughts kinda work through things. What I know for sure is that there are a lot of powerful people that found out how important cyber security is in the past couple years. Snowden, Clinton, Paradise Papers. The market will do its best to try to meet this need.

whataretensors 9y ago

Invest in self driving startups. Oh wait you can't, thanks SEC.