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Oftentimes things that are common-sense at the macro level are really hard to implement or remember day-to-day, and as you mention stories like this can be good
by ford 5y ago
Oftentimes things that are common-sense at the macro level are really hard to implement or remember day-to-day, and as you mention stories like this can be good reminders to keep perspective.
I.e. when investing in the stock market it's almost common knowledge that silently putting money in an ETF every month will outperform almost everyone, even professional traders.
Overreactions to day-to-day things like corrections or a 1-in-a-million hiring situation break the obvious macro strategy
- benreesman 5y agoThe investment analogy is a pretty great one in my opinion, and very timely given what I think we're all sort of agreeing is a set of asset bubbles driven (mostly) by "accommodative" monetary policy. When an asset class is going up and up and up, FOMO can get even serious professionals to go long at a (relatively) high price, and gloss over the risk management. When things correct a bit, a lot of folks realize they hadn't managed the risk and get short "before it gets any worse". This is probably the most common way to buy high and sell low, and while retail investors probably do more of this than hedge fund managers, hedge fun managers also do it. Dollar cost averaging into a diverse set of ETFs is the simplest and cheapest thing that gets you highly competitive returns (at least to date). But I think that this is more to do with how much it takes emotion out of the picture than that SPY is like, ideal. Buffet, and Michael Burry, and others have demonstrated that if you're willing to spend years to decades of 16-hour days reading public filings in a drab office, it's not "hard" to beat the S&P. But those people are a lot more dispassionate about their trades than I am, and I suspect than most people are.