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Tech has done very well the past few years. In the long run, who knows. Gambling is taking on excess risk for excess profit, especially when the odds are again
by et2o 7y ago
Tech has done very well the past few years. In the long run, who knows.
Gambling is taking on excess risk for excess profit, especially when the odds are against you (expected value is negative). This could be poker or active trading. It's gambling.
- tempsy 7y agoBuy and hold long term is not active trading. You’re conflating two completely different things. It’s odd when I find HN to be so risk adverse when working in tech is all about risk. Fortunes are made with risk. Then as an industry we’re apparently all just degenerate gamblers if buying and holding Apple stock is akin to playing roulette.
- et2o 7y agoYes, that is the definition of active trading. I suggest you do more research. Active trading is contrasted to passive trading (index funds). It’s akin to roulette in that it’s statistically non-optimal, not that the level of risk is the same. HN readers tend to be focused upon evidence and mathematically inclined.
- tempsy 7y agoIf that were true literally no HN reader would work at a startup, but we know that isn't the case. Or take any compensation in the form of equity in one company, even at a large one.
- pm90 7y agoThat would be true iff compensation were the only reason for joining startups.
- RussianCow 7y agoFirst of all, financially and statistically speaking, working at a startup almost never makes sense compared to working at a FAANG or similarly high-paying company. (There have been countless articles and discussions about this on HN, so I won't rehash the arguments.) Second, there are other reasons for working at a startup that have little or nothing to do with money (it's more fun/rewarding, you learn more, work/life balance, etc). The latter doesn't really have a parallel in investing unless you only invest in sustainable/ethical companies or something like that, but then the conversation about maximizing profit and beating the market is kind of moot anyway. > Or take any compensation in the form of equity in one company, even at a large one. Public stocks are liquid enough that you can sell them as soon as possible and immediately "cash out", so any equity-based compensation at a public company can reasonably be treated as cash. The same applies to a private VC-backed company with an upcoming IPO, though obviously there is a little bit more risk involved there.
- greglindahl 7y agoThat doesn't follow at all. I work at a tech startup because it's a business in which I think I can add value. I don't think I know enough about finance to move the needle. As for big-company equity, I'm happy to take RSUs in a FAANG , and sell them the day they arrive. Nothing radical there.
- astura 7y agoWorking in tech is not "all about risk"; being a founder/entrepreneur is in any industry, but just an average employee that writes code is hardly risky.