5 ms·

Heh, I think that idea has a lot of promise. Casinos might offer some guidance here given how good they are at making games with fairly straightforward negative

by rurp 4y ago

Heh, I think that idea has a lot of promise. Casinos might offer some guidance here given how good they are at making games with fairly straightforward negative odds seem enticing. We need some sort of responsible investing vehicle that includes gamification, intermittent reinforcement, and a tiny chance for a huge payoff.

sumy23 4y ago
> We need some sort of responsible investing vehicle that includes gamification, intermittent reinforcement, and a tiny chance for a huge payoff. You’re basically describing options.
- KMag 4y ago
  > You’re basically describing options. Well, with vanilla options, you'd need a basket of options to both reasonably closely replicate performance of a broad index (the "responsible vehicle" part) and also a small percentage of the time hitting a big pay-out. Presumably, you'd want mostly short-duration at-the-money calls on a low-fee broad-index ETF (so they often end up owning the ETF), and a small number of deep out-of-the money puts and calls on volatile micro-cap single names to get that sweet sweet irregular reinforcement dopamine hit. This is not investment advice.
  - sumy23 4y ago
    I don't think investing in short-term at-the-money options would be a good strategy because you'd lose a lot to premiums. It'd be better package long positions on the low-fee ETFs mixed with some deep otm options as an investment vehicle. Love the concept!
    - KMag 4y ago
      Sorry, I thought we were talking about restricting ourselves to using strictly a basket of vanilla options.
erehweb 4y ago
Premium Bonds in the UK are part of the way there https://www.nsandi.com/products/premium-bonds https://www.nsandi.com/products/premium-bonds
KMag 4y ago
I think perhaps micro-managing layered limit orders to try to squeeze the last penny out of multi-kilobuck index ETF purchases might be the right way to gamify responsible investing, though that does have the danger of soaking up hours during the workday, so there are negative consequences. Maybe they way to go is lump-sum investing into some bond ETFs with gamified rebalancing into an age-appropriate mix of bond ETFs and broad equity index ETFs, following some pattern similar to value averaging for the rebalance, rather than cost averaging. It shouldn't actually be too hard to get something that has the right balance of feeling like real work, being relatively difficult to screw up (or the most common errors having little long-term effect), and out-performing dollar cost averaging. This isn't investment advice, and even if it were, you shouldn't take investment advice from internet randos.
TylerE 4y ago
Sounds like the lottery. The problem is, when dealing with a zero (or negative) sum game, having a few big winners means you have lots of little losers, or a few big ones.

by rurp 4y ago

sumy23 4y ago

> We need some sort of responsible investing vehicle that includes gamification, intermittent reinforcement, and a tiny chance for a huge payoff. You’re basically describing options.

KMag 4y ago
> You’re basically describing options. Well, with vanilla options, you'd need a basket of options to both reasonably closely replicate performance of a broad index (the "responsible vehicle" part) and also a small percentage of the time hitting a big pay-out. Presumably, you'd want mostly short-duration at-the-money calls on a low-fee broad-index ETF (so they often end up owning the ETF), and a small number of deep out-of-the money puts and calls on volatile micro-cap single names to get that sweet sweet irregular reinforcement dopamine hit. This is not investment advice.
- sumy23 4y ago
  I don't think investing in short-term at-the-money options would be a good strategy because you'd lose a lot to premiums. It'd be better package long positions on the low-fee ETFs mixed with some deep otm options as an investment vehicle. Love the concept!
  - KMag 4y ago
    Sorry, I thought we were talking about restricting ourselves to using strictly a basket of vanilla options.

erehweb 4y ago

Premium Bonds in the UK are part of the way there https://www.nsandi.com/products/premium-bonds https://www.nsandi.com/products/premium-bonds

KMag 4y ago

I think perhaps micro-managing layered limit orders to try to squeeze the last penny out of multi-kilobuck index ETF purchases might be the right way to gamify responsible investing, though that does have the danger of soaking up hours during the workday, so there are negative consequences. Maybe they way to go is lump-sum investing into some bond ETFs with gamified rebalancing into an age-appropriate mix of bond ETFs and broad equity index ETFs, following some pattern similar to value averaging for the rebalance, rather than cost averaging. It shouldn't actually be too hard to get something that has the right balance of feeling like real work, being relatively difficult to screw up (or the most common errors having little long-term effect), and out-performing dollar cost averaging. This isn't investment advice, and even if it were, you shouldn't take investment advice from internet randos.

TylerE 4y ago

Sounds like the lottery. The problem is, when dealing with a zero (or negative) sum game, having a few big winners means you have lots of little losers, or a few big ones.