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Just because there are some things the government does not protect people against, does not mean that investments are the only thing the government protects peo

Just because there are some things the government does not protect people against, does not mean that investments are the only thing the government protects people against. > State lotto Most gambling is either highly regulated or outright banned. Also, gambling is a financial product, which arguably falls under the category of "investment". > Supplements/vitamins of dubious value Because these products are very carefully designed and marketed to avoid the heavy regulation that is applied to medical products > Regular stocks with wildly ridiculous P/E ratios These are investments, so this example doesn't really fit into your thesis that the government only regulates investments. > Various forms of "insurance" Insurance is a financial product that could also be viewed as an "investment". Further, many types of insurance are highly regulated.

solosoyokaze 6y ago
My point is the government isn't "protecting" anyone with these regulations. They will happily watch you spend your life savings buying lotto tickets (not an investment) but if you actually want to put that money into a company, you're going to be scrutinized. An even better example are the accredited investor laws, which also claim to "protect" people but in reality cut off all but the wealthy from the true upside to investing.
- ghaff 6y ago
  I'm very skeptical that there are all these highly lucrative investments that small retail investors are missing out on once you adjust for risk. Many VCs don't actually have particularly great returns overall, for example. The idea that there's some magic money machine out there that only the private club has access to doesn't have a lot of evidence supporting it.
- Aunche 6y ago
  The difference is that a state lottery is completely transparent about their payouts. Companies will often lie about their expected payouts, hence the scrutiny. > but in reality cut off all but the wealthy from the true upside to investing I don't understand the logic here. There isn't a global conspiracy among rich people to stopping others from making money. It doesn't make any difference to Jeff Bezos on whether $1 million gets made by Peter Thiel or a regular person. In fact, Bezos would probably prefer the latter since they're more likely to spend their money on Amazon purchases. The reason for accredited investor status is because losing money hurts more than winning money benefits unless if you have a lot of money to begin with. One regular person making $1 million doesn't make up for 10 regular people losing $50,000, even though that would be wildly EV positive.

solosoyokaze 6y ago

My point is the government isn't "protecting" anyone with these regulations. They will happily watch you spend your life savings buying lotto tickets (not an investment) but if you actually want to put that money into a company, you're going to be scrutinized. An even better example are the accredited investor laws, which also claim to "protect" people but in reality cut off all but the wealthy from the true upside to investing.

ghaff 6y ago
I'm very skeptical that there are all these highly lucrative investments that small retail investors are missing out on once you adjust for risk. Many VCs don't actually have particularly great returns overall, for example. The idea that there's some magic money machine out there that only the private club has access to doesn't have a lot of evidence supporting it.
Aunche 6y ago
The difference is that a state lottery is completely transparent about their payouts. Companies will often lie about their expected payouts, hence the scrutiny. > but in reality cut off all but the wealthy from the true upside to investing I don't understand the logic here. There isn't a global conspiracy among rich people to stopping others from making money. It doesn't make any difference to Jeff Bezos on whether $1 million gets made by Peter Thiel or a regular person. In fact, Bezos would probably prefer the latter since they're more likely to spend their money on Amazon purchases. The reason for accredited investor status is because losing money hurts more than winning money benefits unless if you have a lot of money to begin with. One regular person making $1 million doesn't make up for 10 regular people losing $50,000, even though that would be wildly EV positive.