4 ms·

Nothing particulary bad for some less smart people loosing money on stuff they don't understand. Let it be a lesson. Maybe next time they won't believe every t

• jl2718 4y ago
  What do “more smart people” invest in, and how well do they understand it?
  • solveit 4y ago
    Indices, mostly. And they understand it well enough to understand that they have no hope of outperforming by thinking for themselves, which is why they invest in indices rather than picking individual things to invest in.
    • jl2718 4y ago
      Firstly, there is zero chance of understanding an index. Corporations are legal entities formed by documents, each unique, holding assets like intellectual property, and executed by people. It is clearly infeasible you understand all of that for an index. The best you can do is extrapolate from the history of “number go up”. Secondly, you invoke the efficient market hypothesis for stocks via portfolio theory, which should then apply just as well to alternatives. Higher risk/volatility implies higher expected returns. This is assuming perfect information transparency. This is where your argument fails. Crypto (on-chain) is a perfectly-transparent market. Stocks are almost perfectly opaque. So crypto is an almost tautologically efficient regardless of whether it shoots the moon or drops to zero. Until recently, crypto was also uncorrelated with stocks, which made them a perfect return-boosting companion to a portfolio. Not anymore of course.
  • asimpletune 4y ago
    Smart people invest in things they understand.