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> I hesitate to ask -- do we really think people are stupid enough to gamble away lots of money they can't afford to lose? Oh. Yes. Yes, yes, yes. And it's not
by pnathan 6y ago
> I hesitate to ask -- do we really think people are stupid enough to gamble away lots of money they can't afford to lose?
Oh. Yes. Yes, yes, yes. And it's not just the stupid people. Isaac Newton famously lost a fortune in speculation.
That's the thing about manias. It takes over and so many people all over go broke by the end. They are famous for it: they are a predictable and repeating tragedy.
Recognizing a mania is one of the first lessons someone who wants to do anything with stocks beyond INSERT 15% INTO VANGUARD 500 INDEX should do.
- axiosgunnar 6y agoSome, including Michael Burry (who‘s hedge fund profited almost 500% during the 2008 crisis) even go as far as calling index ETFs, like that one you mentioned, to be a bubble!
- pnathan 6y agoa proper index fund isn't a proper bubble, since it's proportional against an index, the net underlying asset that said, I grasp that there are some odd knock on effects with so many assets tied up in what are, approximately, a derivative.