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I actually had this exact experience in a civics class in junior high school -- in 1979! We pored through the stock listings in a physical newspaper every day
by lisper 5y ago
I actually had this exact experience in a civics class in junior high school -- in 1979! We pored through the stock listings in a physical newspaper every day for several weeks and recorded our buy and sell decisions. The "winner" bought a penny stock which went from 1/8 to 1/4 in a day (or something like that). And I did in fact learn exactly the wrong lesson from that because 20 years later I lost a fair bit of money in the dotcom boom trying to replicate that strategy.
It is very hard to come up with a teaching strategy that can overcome survivorship bias.
- tudelo 5y agoI don't think that is the "wrong" lesson. It's a lesson in risk. But it's not a viable strategy long term for most. I think if you teach the concept of ruin, the chance of going bust, you can help develop a healthy relationship with the concept of risk and investing. It's also pretty easy to show real examples of what risk can cause... "guh"
- lisper 5y agoIt was the wrong lesson because the focus was entirely on who made the most money. And because it was funny money, the losers didn't actually suffer any real consequences other than the psychological pain of not being the winner. It flattened the risk-reward curve to the point where there was no real difference between losing 90% and simply coming in second. IMHO that is the wrong lesson (though I also note in passing that it is a philosophy that many Americans seem to subscribe to).