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He’s not wrong but remember “the markets can remain irrational longer than you can remain solvent” -- ancient financial proverb

• ethbro 7y ago
  That was coined for investment capital that comes with a cost. E.g. (in its simplest) borrowing money to trade with, and then having to make regular payments to maintain your positions. Assuming you have no pressing needs for your invested capital (e.g. most retail investors), the market cannot actually stay irrational longer than you can remain solvent.
  • isignal 7y ago
    This is true for typical long positions but not for time based options. Some retail investors do buy those too.
    • turc1656 7y ago
      Time-based options have a fixed cost which you pay up front. So again, there is no risk of insolvency because you've already paid up front and capped your losses.
      • _lacan 7y ago
        Not if your strategy is to short the contracts instead of buying it.