5 ms·

Just because you come from the tech industry does not mean you know something special about the tech companies, their business prospects, financials and how att

Just because you come from the tech industry does not mean you know something special about the tech companies, their business prospects, financials and how attractively they are priced.

agent008t 5y ago
Another problem with concentrating in the industry in which one works (and even worse - the company for which one works), is that in the event of a downturn, both your job/career and your investments will be hit at the same time. Just when you need your investments the most, they will be worth less than you expected.
- sloaken 5y ago
  That is what happened with Enron. Company went under, peoples 401K were in the company stock, company matching was in the company stock. After that I noticed companies would either not let you put your donation to the 401K be in company stock, but sometimes the matching would be.
- muzani 5y ago
  Dot Com is one of the biggest examples. Tech is everywhere now and it's less likely but I can definitely see this for crypto because everything is anchored on Bitcoin (and Tether).
Graffur 5y ago
Although it may give you some beneficial thought processes about products and future state of the tech industry.
croo 5y ago
You have way more insight than the average non-tech person. You know who is big and a small fry in the game, know the trends. You read the tech news in the last 10 years. You have preferences and opinions. I cannot say the same about say, agriculture, food or musical instruments. So yeah, we have some kind of edge here.
- agent008t 5y ago
  You are not competing against the average non-tech person, but against professional investors that study the companies inside out, question the management, consult domain experts etc. The knowledge you described is unlikely to give you an edge if you have never even looked at the companies' financials or don't know what a discounted cash flow is.
  - askafriend 5y ago
    It doesn't take a genius or a DCF model to know that investing in Apple a couple years post-iPhone is a no-brainer. Momentum and trend based investing is just as successful as nerding out over numbers. You can simply be right in broad strokes and be successful - you don't have to get every detail right. It helps to have a long time horizon.
    - agent008t 5y ago
      Sounds like hindsight bias. If it was a no-brainer at the time, everyone would have wanted to buy Apple stock and few would have wanted to sell, pushing the price up to where it no longer is a no-brainer.
askafriend 5y ago
Actually I do have special insights about the tech industry as a result of me being entrenched in it. These are views that have taken years to proliferate into mainstream consensus view. Investing against my insight into the industry is the best thing I've done.

Just because you come from the tech industry does not mean you know something special about the tech companies, their business prospects, financials and how attractively they are priced.

agent008t 5y ago

Another problem with concentrating in the industry in which one works (and even worse - the company for which one works), is that in the event of a downturn, both your job/career and your investments will be hit at the same time. Just when you need your investments the most, they will be worth less than you expected.

sloaken 5y ago
That is what happened with Enron. Company went under, peoples 401K were in the company stock, company matching was in the company stock. After that I noticed companies would either not let you put your donation to the 401K be in company stock, but sometimes the matching would be.
muzani 5y ago
Dot Com is one of the biggest examples. Tech is everywhere now and it's less likely but I can definitely see this for crypto because everything is anchored on Bitcoin (and Tether).

Graffur 5y ago

Although it may give you some beneficial thought processes about products and future state of the tech industry.

croo 5y ago

You have way more insight than the average non-tech person. You know who is big and a small fry in the game, know the trends. You read the tech news in the last 10 years. You have preferences and opinions. I cannot say the same about say, agriculture, food or musical instruments. So yeah, we have some kind of edge here.

agent008t 5y ago
You are not competing against the average non-tech person, but against professional investors that study the companies inside out, question the management, consult domain experts etc. The knowledge you described is unlikely to give you an edge if you have never even looked at the companies' financials or don't know what a discounted cash flow is.
- askafriend 5y ago
  It doesn't take a genius or a DCF model to know that investing in Apple a couple years post-iPhone is a no-brainer. Momentum and trend based investing is just as successful as nerding out over numbers. You can simply be right in broad strokes and be successful - you don't have to get every detail right. It helps to have a long time horizon.
  - agent008t 5y ago
    Sounds like hindsight bias. If it was a no-brainer at the time, everyone would have wanted to buy Apple stock and few would have wanted to sell, pushing the price up to where it no longer is a no-brainer.

askafriend 5y ago

Actually I do have special insights about the tech industry as a result of me being entrenched in it. These are views that have taken years to proliferate into mainstream consensus view. Investing against my insight into the industry is the best thing I've done.