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> But these stocks are based on a reality that no longer exists. The emperor has no clothes. Ok, buy deep OTM put options for tech stocks then? They say the m

> But these stocks are based on a reality that no longer exists. The emperor has no clothes. Ok, buy deep OTM put options for tech stocks then? They say the market can stay irrational longer than you can remain solvent. I’d say the market wasn’t all that rational to begin with. At some level investing is a big game of chicken where you try to get out before everyone realizes how inflated it’s become. As Taleb says, don’t tell me what you think, show me your portfolio.

whatshisface 8y ago
"Buy options" and "don't put this in to your passive retirement fund" are two very different levels of gloom-and-dooming. The market might actually become rational over the next 50+ years; there is such a thing as true information that can't be used to make money in any reasonable term. Another example of true information that can't be used to make money is information that is already priced in. Since this author is not exactly the first tech doomsayer I would be surprised if the future where everyone goes back to highway billboards is not already contributing to the price.
- whttheuuu 8y ago
  The difference between "buy options" and "don't put this in your passive retirement fund" is the same difference as "I'm confident in the advice im dispensing" and "I have no idea what I'm talking about".
  - palebluedot 8y ago
    The difference between "buy options" and "don't put this in your passive retirement fund" is the same difference as "I'm confident in the advice im dispensing" and "I have no idea what I'm talking about". No, it's not at all. Buying options is actively betting on both price and time targets, and carries a much different risk profile compared to simply avoiding a specific investment.
    - whatshisface 8y ago
      Buying a stock is a "rise eventually" bet, I wonder if it is even possible to buy a "fall eventually" bet. Probably not because nobody would be willing to bet that a company will be around forever!
      - hedora 8y ago
        Holding cash is a “fall eventually” bet. It has negative payoff after inflation, which is worse than other low to zero risk options (like savings accounts and govt bonds). In one view, and with long return horizons, an index-based etf is a “will be around forever bet”, in that it bets there will be economic growth on average for as long as the dollar is worth anything. The main way it can go wrong is with hyper inflation. Maybe going long, with 100% govt bonds is a decent fall eventually bet, but again, that’s targeting a very specific scenario where all of the economy crashes for a long time, but bonds still pay out (better than real estate or other physical goods).
      - monochromatic 8y ago
        Short selling. But be careful with margin calls.
        whatshisface 8y ago
        Shorting has a specific delivery date, which is different from holding stock because you can choose when to sell it.
        monochromatic 8y ago
        I don’t believe that’s right.
  - disishhsha 8y ago
    Option pricing has a time value component, and at a multi-year time horizon this component is prohibitively high. Eg. suppose I want to bet Oracle will go under in 20 years, how do I do that?
    - deleted 8y ago
      [deleted]

whatshisface 8y ago

"Buy options" and "don't put this in to your passive retirement fund" are two very different levels of gloom-and-dooming. The market might actually become rational over the next 50+ years; there is such a thing as true information that can't be used to make money in any reasonable term. Another example of true information that can't be used to make money is information that is already priced in. Since this author is not exactly the first tech doomsayer I would be surprised if the future where everyone goes back to highway billboards is not already contributing to the price.

whttheuuu 8y ago
The difference between "buy options" and "don't put this in your passive retirement fund" is the same difference as "I'm confident in the advice im dispensing" and "I have no idea what I'm talking about".
- palebluedot 8y ago
  The difference between "buy options" and "don't put this in your passive retirement fund" is the same difference as "I'm confident in the advice im dispensing" and "I have no idea what I'm talking about". No, it's not at all. Buying options is actively betting on both price and time targets, and carries a much different risk profile compared to simply avoiding a specific investment.
  - whatshisface 8y ago
    Buying a stock is a "rise eventually" bet, I wonder if it is even possible to buy a "fall eventually" bet. Probably not because nobody would be willing to bet that a company will be around forever!
    - hedora 8y ago
      Holding cash is a “fall eventually” bet. It has negative payoff after inflation, which is worse than other low to zero risk options (like savings accounts and govt bonds). In one view, and with long return horizons, an index-based etf is a “will be around forever bet”, in that it bets there will be economic growth on average for as long as the dollar is worth anything. The main way it can go wrong is with hyper inflation. Maybe going long, with 100% govt bonds is a decent fall eventually bet, but again, that’s targeting a very specific scenario where all of the economy crashes for a long time, but bonds still pay out (better than real estate or other physical goods).
    - monochromatic 8y ago
      Short selling. But be careful with margin calls.
      - whatshisface 8y ago
        Shorting has a specific delivery date, which is different from holding stock because you can choose when to sell it.
        monochromatic 8y ago
        I don’t believe that’s right.
- disishhsha 8y ago
  Option pricing has a time value component, and at a multi-year time horizon this component is prohibitively high. Eg. suppose I want to bet Oracle will go under in 20 years, how do I do that?
  - deleted 8y ago
    [deleted]