"In addition to my views about financial literacy, I have argued in the past that good financial regulation would divide investments into normal ones and dumb o

"In addition to my views about financial literacy, I have argued in the past that good financial regulation would divide investments into normal ones and dumb ones. Normal ones would be, like, index funds or whatever, and anyone could buy them. Dumb ones would be penny stocks and private investments and, good lord, leveraged ETNs on mortgage REITs, and also anyone could buy them. But you’d have to get a Certificate of Dumb Investment before buying the dumb ones. I spelled out the application process once: "To get that certificate, you sign a form. The form is one page with a lot of white space. It says in very large letters: “I want to buy a dumb investment. I understand that the person selling it will almost certainly steal all my money, and that I would almost certainly be better off just buying index funds, but I want to do this dumb thing anyway. I agree that I will never, under any circumstances, complain to anyone when this investment inevitably goes wrong. I understand that violating this agreement is a felony.” "Then you take the form to an SEC employee, who slaps you hard across the face and says “really???” And if you reply “yes really” then she gives you the certificate. … "If an article ever appears in the Wall Street Journal in which you (or your lawyer) are quoted saying that you were just a simple dentist, didn’t understand what you were buying and were swindled by the seller’s flashy sales pitch, then you go to prison." I so wish that were the procedure.