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Hey, this is what I appreciate about US investors, they rather put their money in BS moon-shot ideas that will 99% fail, but this way they fuel a high demand fo

Hey, this is what I appreciate about US investors, they rather put their money in BS moon-shot ideas that will 99% fail, but this way they fuel a high demand for SW jobs leading to competition and high wages in the industry, instead of putting all their money in stuff with a 99% success rate like real estate, like investors do here in Europe. The fact that investors are constantly chasing new and risky ideas, instead of just zero sum assets, is why the US has the best jobs market in the world. If investors and consumers were responsible and conservative with their money, dev wages would be much much lower. So enjoy it, because you have it good.

tracerbulletx 3y ago
This is right. Try stuff, invest energy in building things, no one knows in advance what will take off. It is not bad or wasteful in any real sense. Money is only useful when it's motivating action. If an idea is bad that branch of investment will eventually wither and die if nothing useful is found. You do not need to take personal offense if you think a current trend is dumb. You might be wrong, you might be right, the only thing I can say for sure is that whining about it is lame, and if you think you know better then go and try to build something else and make bets on the trends you think will become real waves.
- WalterBright 3y ago
  Old curmudgeon that I am, I often suggest to people who are sure they know better how markets will move that they invest appropriately (you can even make investments that payoff if the market goes down!). Of course, none of them ever do. Investing your own money is a heluva lot different, and it's where the rubber meets the road.
anonymouskimmer 3y ago
Piggy-backing a fashion means that if it crashes, or when it slows down, a lot of companies cut jobs at once.
- ChuckNorris89 3y ago
  Do you think those people would have been better off without those jobs having existed in the first place?
  - anonymouskimmer 3y ago
    For any individual, it depends on when they enter the job market. I'd prefer multiple fashions in play at once.
    - ChuckNorris89 3y ago
      The thing is, without those risky hypergrowth BS companies, your jobs market for "safe jobs" would be shit. So you do have both options available at the same time. Nobody is forcing you to work at FAANGs or other hypergrowth companies that have redundancies, there's older established companies that didn't have redundancies which of course, pay much less than FAANGs do. Places that only have safe employment options, without hypergrowth, also have massively lower wages for everyone.
      - anonymouskimmer 3y ago
        It's not about "safe jobs", it's about fostering diverse commercial environments in which people can readily get good-fit "new jobs" when their old job disappears. This sort of environment has the side-effect of increasing wages for everyone. When market contractions hit even "safe jobs" aren't necessarily safe. Competition is important. But there are limits, after which it's better for everyone if the business-creator comes up with a novel idea and pursues that instead of iterating on everyone else. This is very difficult. It might be a bit less difficult if the culture didn't encourage followership in its leaders and funders.
gmt2027 3y ago
US investors are not doing this out of generosity. European elites built up their wealth with land holdings and real estate over centuries. In most cases, the value of these assets are unknown. There is little benefit to be gained from disposing of that wealth to speculate on the latest fad and facing taxes. The Duke of Westminster for example was the youngest billionaire in the UK with an estimated net worth of £10bn at 35. His family's land includes 100s of acres of the most valuable real estate in London. Their ancestor was granted these lands by William the Conqueror in 1066.
- ChuckNorris89 3y ago
  >US investors are not doing this out of generosity. Of course, neither are European investors, but that's not the point. The point is a dinamic jobs market where the money goes on ideas and businesses, insted of assets, pushes all wages up and benefits the middle class. Investors living off land and other such rentseeking endeavors destroys the middle class as it's just feudalism with extra steps. >There is little benefit to be gained from disposing of that wealth to speculate on the latest fad and facing taxes. Of course, but this is the fault of our tax system which incentivizes land hoarding and rent seeking by those already afluent, at the expense of the have-nots looking to buy in.
  - denton-scratch 3y ago
    "Rent-seeking" is generally a perjorative term. I let out a family house. The rent is the greater part of my pension. I used to live there, until I was divorced (it was too big for one person). It's been clear to me for decades that freehold land was a better investment (here) than investing in a conventional pension; and I lived through the outright theft by Robert Maxwell of the whole of his staff's occupational pension fund. So I paid off my mortgage as quickly as I could. Regarding the chores, that someone mentioned upthread: I have a long-term tenant, a family. Their kids go to school around the corner. They mow the lawn. They always pay the rent by bank transfer. I hire tradesmen to deal with the gas, plumbing and electricals. I visit twice a year to check that everything's OK. These aren't really problems. And rental housing is scarce where I live. It's a university town with several important hospitals, and surrounded by a no-development green belt. I'm providing a social benefit. I'm not sure when this kind of "rent-seeking" turns into the kind of rent-seeking of which people disapprove.
sangnoir 3y ago
> ...but this way they fuel a high demand for SW jobs leading to competition and high wages in the industry, There are many sides to this. Over a decade ago, Apple colluded with other tech companies to artificially suppress wages by crafting "no-poaching" agreements. Facebook refused to play ball.
WalterBright 3y ago
99% success rate in real estate? I've lost money on real estate several times. I avoid it now. Most people seem to think that if they bought a house for $100,000, and sold it for $200,000, they made a $100,000 profit. Nope. There's: 1. property tax 2. insurance 3. maintenance 4. upgrades 5. dealing with the lawn 6. 6% commission taken by the real estate agent 7. inflation 8. all the time spent dealing with it 9. mortgage interest 10. the costs from having it sit empty on the market waiting for a buyer 11. and the most neglected cost, the time value of money
- ChuckNorris89 3y ago
  Not in EU/UK which I was referring to in my comment. Properties here are sacred and the tax incentives, tax breaks, basically zero inheritance taxes, make it one of the safest kind of investments. And that's without the scummy practices of the central banks and governments who manipulate the market to keep prices going up.
- vkou 3y ago
  #1, #2, #3, #4, #5 are all costs of use of the property, not ownership of it. Either you're using it for yourself (In which case, you'd either be paying yourself for these things, or paying your landlord), or you're letting it out to someone (In which case, they are paying for use of the property). If you just let the property rot without a tenant, then, yeah, this punishes you. I'd recommend against letting a property rot without a tenant, just like I'd recommend against buying 500 barrels of crude oil, and letting them rot away into worthless sludge in your cellar over twenty years. All things that we buy have a limited shelf life, you need to use and maintain them before they expire. Structures built on a property are no different. #6-11 are real costs of investing into property, and I agree - they cost a hell of a lot more time and money than buying an index fund and sleeping on it for 40 years.
  - magnuspaaske 3y ago
    Not really, there's a real cost of ownership for real estate that is more expensive than for owning stock in a company for instance. You still need a place to live and owning can be great for that – as to being a landlord there might still be better ways to make a return. But the real problem with real estate "investment" is that the return doesn't come from doing something productive but rather is predicated on preventing someone else from doing something productive, namely making more buildings.

tracerbulletx 3y ago

This is right. Try stuff, invest energy in building things, no one knows in advance what will take off. It is not bad or wasteful in any real sense. Money is only useful when it's motivating action. If an idea is bad that branch of investment will eventually wither and die if nothing useful is found. You do not need to take personal offense if you think a current trend is dumb. You might be wrong, you might be right, the only thing I can say for sure is that whining about it is lame, and if you think you know better then go and try to build something else and make bets on the trends you think will become real waves.

WalterBright 3y ago
Old curmudgeon that I am, I often suggest to people who are sure they know better how markets will move that they invest appropriately (you can even make investments that payoff if the market goes down!). Of course, none of them ever do. Investing your own money is a heluva lot different, and it's where the rubber meets the road.

anonymouskimmer 3y ago

Piggy-backing a fashion means that if it crashes, or when it slows down, a lot of companies cut jobs at once.

ChuckNorris89 3y ago
Do you think those people would have been better off without those jobs having existed in the first place?
- anonymouskimmer 3y ago
  For any individual, it depends on when they enter the job market. I'd prefer multiple fashions in play at once.
  - ChuckNorris89 3y ago
    The thing is, without those risky hypergrowth BS companies, your jobs market for "safe jobs" would be shit. So you do have both options available at the same time. Nobody is forcing you to work at FAANGs or other hypergrowth companies that have redundancies, there's older established companies that didn't have redundancies which of course, pay much less than FAANGs do. Places that only have safe employment options, without hypergrowth, also have massively lower wages for everyone.
    - anonymouskimmer 3y ago
      It's not about "safe jobs", it's about fostering diverse commercial environments in which people can readily get good-fit "new jobs" when their old job disappears. This sort of environment has the side-effect of increasing wages for everyone. When market contractions hit even "safe jobs" aren't necessarily safe. Competition is important. But there are limits, after which it's better for everyone if the business-creator comes up with a novel idea and pursues that instead of iterating on everyone else. This is very difficult. It might be a bit less difficult if the culture didn't encourage followership in its leaders and funders.

gmt2027 3y ago

US investors are not doing this out of generosity. European elites built up their wealth with land holdings and real estate over centuries. In most cases, the value of these assets are unknown. There is little benefit to be gained from disposing of that wealth to speculate on the latest fad and facing taxes. The Duke of Westminster for example was the youngest billionaire in the UK with an estimated net worth of £10bn at 35. His family's land includes 100s of acres of the most valuable real estate in London. Their ancestor was granted these lands by William the Conqueror in 1066.

ChuckNorris89 3y ago
>US investors are not doing this out of generosity. Of course, neither are European investors, but that's not the point. The point is a dinamic jobs market where the money goes on ideas and businesses, insted of assets, pushes all wages up and benefits the middle class. Investors living off land and other such rentseeking endeavors destroys the middle class as it's just feudalism with extra steps. >There is little benefit to be gained from disposing of that wealth to speculate on the latest fad and facing taxes. Of course, but this is the fault of our tax system which incentivizes land hoarding and rent seeking by those already afluent, at the expense of the have-nots looking to buy in.
- denton-scratch 3y ago
  "Rent-seeking" is generally a perjorative term. I let out a family house. The rent is the greater part of my pension. I used to live there, until I was divorced (it was too big for one person). It's been clear to me for decades that freehold land was a better investment (here) than investing in a conventional pension; and I lived through the outright theft by Robert Maxwell of the whole of his staff's occupational pension fund. So I paid off my mortgage as quickly as I could. Regarding the chores, that someone mentioned upthread: I have a long-term tenant, a family. Their kids go to school around the corner. They mow the lawn. They always pay the rent by bank transfer. I hire tradesmen to deal with the gas, plumbing and electricals. I visit twice a year to check that everything's OK. These aren't really problems. And rental housing is scarce where I live. It's a university town with several important hospitals, and surrounded by a no-development green belt. I'm providing a social benefit. I'm not sure when this kind of "rent-seeking" turns into the kind of rent-seeking of which people disapprove.

sangnoir 3y ago

> ...but this way they fuel a high demand for SW jobs leading to competition and high wages in the industry, There are many sides to this. Over a decade ago, Apple colluded with other tech companies to artificially suppress wages by crafting "no-poaching" agreements. Facebook refused to play ball.

WalterBright 3y ago

99% success rate in real estate? I've lost money on real estate several times. I avoid it now. Most people seem to think that if they bought a house for $100,000, and sold it for $200,000, they made a $100,000 profit. Nope. There's: 1. property tax 2. insurance 3. maintenance 4. upgrades 5. dealing with the lawn 6. 6% commission taken by the real estate agent 7. inflation 8. all the time spent dealing with it 9. mortgage interest 10. the costs from having it sit empty on the market waiting for a buyer 11. and the most neglected cost, the time value of money

ChuckNorris89 3y ago
Not in EU/UK which I was referring to in my comment. Properties here are sacred and the tax incentives, tax breaks, basically zero inheritance taxes, make it one of the safest kind of investments. And that's without the scummy practices of the central banks and governments who manipulate the market to keep prices going up.
vkou 3y ago
#1, #2, #3, #4, #5 are all costs of use of the property, not ownership of it. Either you're using it for yourself (In which case, you'd either be paying yourself for these things, or paying your landlord), or you're letting it out to someone (In which case, they are paying for use of the property). If you just let the property rot without a tenant, then, yeah, this punishes you. I'd recommend against letting a property rot without a tenant, just like I'd recommend against buying 500 barrels of crude oil, and letting them rot away into worthless sludge in your cellar over twenty years. All things that we buy have a limited shelf life, you need to use and maintain them before they expire. Structures built on a property are no different. #6-11 are real costs of investing into property, and I agree - they cost a hell of a lot more time and money than buying an index fund and sleeping on it for 40 years.
- magnuspaaske 3y ago
  Not really, there's a real cost of ownership for real estate that is more expensive than for owning stock in a company for instance. You still need a place to live and owning can be great for that – as to being a landlord there might still be better ways to make a return. But the real problem with real estate "investment" is that the return doesn't come from doing something productive but rather is predicated on preventing someone else from doing something productive, namely making more buildings.