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Owning a stock is a verb. Allocating capital takes a lot of work, and a lot of courage. Gordon Gecko is a fictional character. Having said that, Blackstone/roc

Owning a stock is a verb. Allocating capital takes a lot of work, and a lot of courage. Gordon Gecko is a fictional character. Having said that, Blackstone/rock has grown far too much. People need to stop sending their money to their index funds.

l33t7332273 3y ago
> Allocating capital takes a lot of work How?
- boeingUH60 3y ago
  It takes a lot of work to decide the right investments and manage the companies you've invested in to ensure they don't go kaboom. Private equity takes active ownership in the companies they own, unlike BlackRock that invests and at most takes a few board seats.
  - l33t7332273 3y ago
    The people investing those large quantities aren’t the ones managing those funds.
    - FredPret 3y ago
      Quis custodiet ipsos custodes? There is no way to own something without being all over it. Especially if you outsource the management of it, you now have to watch your money managers like a hawk and also accept a lower rate of return.
defrost 3y ago
> Allocating capital takes a lot of work, and a lot of courage. Less so when you've captured government and setting|opposing policy at Senate|POTUS level (in US, in a similar manner elsewhere) to worsen health insurance and housing access to your own benefit. The Ruling Class S01E03 American Buyout did a tidy little episode on the downsides of The Blackstone Group. https://www.mgmplus.com/series/the-ruling-class/watch/season/1/episode/3 https://www.mgmplus.com/series/the-ruling-class/watch/season... I'm not anti-capitalist, but I am opposed to unregulated behemoths warping safeguards by the weight of their own capital and lobbying.
- FredPret 3y ago
  I'm a capitalist and I agree. Capitalism works best in a democracy so the tragedy of the commons and negative externalities can be controlled.
gruez 3y ago
>Having said that, Blackstone/rock has grown far too much. People need to stop sending their money to their index funds. Where else do you send it to? Vanguard, with 7.7T AUM? For reference, Blackrock's AUM is 9.4T.
- FredPret 3y ago
  My choice was to pick stocks. This is hard so I built a stock analysis platform for myself. But there are much better ways to get a diversified basket of solid stocks than blindly sending your money to the same 500 companies everyone else is sending their money to. There isn’t a simple formulaic answer to the question of how society should most optimally invest it’s excess capital.
  - anthomtb 3y ago
    > There isn’t a simple formulaic answer to the question of how society should most optimally invest it’s excess capital. So then investing in an index fund should be a fine choice for some, even many, correct?
    - FredPret 3y ago
      Yes but optimally there would be at least some proliferation in index funds, and they would index differently. There are 2 top funds that invest in the same 500 companies. Many in the US who earns well is sending x% of their income to these funds without forethought. It's far too much mindless capital concentration. Even without the index funds, the S&P 500 is used as a base reference in many investment contexts. When everyone blindly accepts a truth in investing, it's worth keeping an careful eye on it to make sure it stays true.
      - gruez 3y ago
        > Yes but optimally there would be at least some proliferation in index funds, and they would index differently. Great, now investors have to choose between which index fund to pick. What makes you think the average investor is qualified to make that choice? By definition one of them will make above average returns, and the other below average returns, so half of investors will make below average returns and the other half will make above average returns. You can't have everyone making above average returns. Why not split the difference and invest in both of them (ie. buy the market), and get average returns without having to worry about which one to choose? That's basically what buying broad market index funds (eg. VTI or ITOT) does.
worksonmine 3y ago
> Allocating capital takes a lot of work, and a lot of courage. I don't think it does. Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. Add some contacts to that (like private phone calls with the FED) and it's even easier. Having capital is a shortcut to making things happen. What's difficult and takes work is bootstrapping without capital.
- gottorf 3y ago
  > Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. It's easy when you're talking about someone's 401k with half a million dollars in it. With one click you can put it in the S&P 500, a 60/40 split, a target date fund, or if you're young and frisky maybe you put it in a mix of crypto, renewable energy companies with an uncertain future, and some pre-trial drug companies, because you can afford to lose it all. If you're BlackRock with $9T AUM and you know that it's other people's retirement money you're managing, it's a lot harder. That much capital moves markets. You can't go in and out of positions easily, because the very act of you buying or selling alters the price appreciably; that is, you're too big of a player to be an invisible participant in the market. Hell, even a high net worth individual looking to place $50mm isn't going to have an "easy" job, once you realize that the name of the game is actually preserving the purchasing power of that capital. That takes work. It doesn't come for free. > What's difficult and takes work is bootstrapping without capital. This is also true. But if managing capital was that easy, nobody rich would ever not be rich anymore. The Vanderbilt family was at one point estimated to be worth more than 1% of the US GDP; yet by the fourth generation, they sold their famous mansion, The Breakers.
jt6rajn45ajaq4 3y ago
> Allocating capital takes a lot of work That's why most people with a lot of capital hire others to manage it. Also, there are many cases where capital is just "left to sit" and still grows. If you get lucky enough, even dead people can grow their capital. Capitalism might help if you want the strongest loggers to cut the most logs. But it doesn't help the smartest scientists do more science. Science just doesn't work that way. That's why we are transitioning from picies (age of mass production) to aquarius (age of resource mangement). Why will our children have to carry their own water?

l33t7332273 3y ago

> Allocating capital takes a lot of work How?

boeingUH60 3y ago
It takes a lot of work to decide the right investments and manage the companies you've invested in to ensure they don't go kaboom. Private equity takes active ownership in the companies they own, unlike BlackRock that invests and at most takes a few board seats.
- l33t7332273 3y ago
  The people investing those large quantities aren’t the ones managing those funds.
  - FredPret 3y ago
    Quis custodiet ipsos custodes? There is no way to own something without being all over it. Especially if you outsource the management of it, you now have to watch your money managers like a hawk and also accept a lower rate of return.

defrost 3y ago

> Allocating capital takes a lot of work, and a lot of courage. Less so when you've captured government and setting|opposing policy at Senate|POTUS level (in US, in a similar manner elsewhere) to worsen health insurance and housing access to your own benefit. The Ruling Class S01E03 American Buyout did a tidy little episode on the downsides of The Blackstone Group. https://www.mgmplus.com/series/the-ruling-class/watch/season/1/episode/3 https://www.mgmplus.com/series/the-ruling-class/watch/season... I'm not anti-capitalist, but I am opposed to unregulated behemoths warping safeguards by the weight of their own capital and lobbying.

FredPret 3y ago
I'm a capitalist and I agree. Capitalism works best in a democracy so the tragedy of the commons and negative externalities can be controlled.

gruez 3y ago

>Having said that, Blackstone/rock has grown far too much. People need to stop sending their money to their index funds. Where else do you send it to? Vanguard, with 7.7T AUM? For reference, Blackrock's AUM is 9.4T.

FredPret 3y ago
My choice was to pick stocks. This is hard so I built a stock analysis platform for myself. But there are much better ways to get a diversified basket of solid stocks than blindly sending your money to the same 500 companies everyone else is sending their money to. There isn’t a simple formulaic answer to the question of how society should most optimally invest it’s excess capital.
- anthomtb 3y ago
  > There isn’t a simple formulaic answer to the question of how society should most optimally invest it’s excess capital. So then investing in an index fund should be a fine choice for some, even many, correct?
  - FredPret 3y ago
    Yes but optimally there would be at least some proliferation in index funds, and they would index differently. There are 2 top funds that invest in the same 500 companies. Many in the US who earns well is sending x% of their income to these funds without forethought. It's far too much mindless capital concentration. Even without the index funds, the S&P 500 is used as a base reference in many investment contexts. When everyone blindly accepts a truth in investing, it's worth keeping an careful eye on it to make sure it stays true.
    - gruez 3y ago
      > Yes but optimally there would be at least some proliferation in index funds, and they would index differently. Great, now investors have to choose between which index fund to pick. What makes you think the average investor is qualified to make that choice? By definition one of them will make above average returns, and the other below average returns, so half of investors will make below average returns and the other half will make above average returns. You can't have everyone making above average returns. Why not split the difference and invest in both of them (ie. buy the market), and get average returns without having to worry about which one to choose? That's basically what buying broad market index funds (eg. VTI or ITOT) does.

worksonmine 3y ago

> Allocating capital takes a lot of work, and a lot of courage. I don't think it does. Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. Add some contacts to that (like private phone calls with the FED) and it's even easier. Having capital is a shortcut to making things happen. What's difficult and takes work is bootstrapping without capital.

gottorf 3y ago
> Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. It's easy when you're talking about someone's 401k with half a million dollars in it. With one click you can put it in the S&P 500, a 60/40 split, a target date fund, or if you're young and frisky maybe you put it in a mix of crypto, renewable energy companies with an uncertain future, and some pre-trial drug companies, because you can afford to lose it all. If you're BlackRock with $9T AUM and you know that it's other people's retirement money you're managing, it's a lot harder. That much capital moves markets. You can't go in and out of positions easily, because the very act of you buying or selling alters the price appreciably; that is, you're too big of a player to be an invisible participant in the market. Hell, even a high net worth individual looking to place $50mm isn't going to have an "easy" job, once you realize that the name of the game is actually preserving the purchasing power of that capital. That takes work. It doesn't come for free. > What's difficult and takes work is bootstrapping without capital. This is also true. But if managing capital was that easy, nobody rich would ever not be rich anymore. The Vanderbilt family was at one point estimated to be worth more than 1% of the US GDP; yet by the fourth generation, they sold their famous mansion, The Breakers.

jt6rajn45ajaq4 3y ago

> Allocating capital takes a lot of work That's why most people with a lot of capital hire others to manage it. Also, there are many cases where capital is just "left to sit" and still grows. If you get lucky enough, even dead people can grow their capital. Capitalism might help if you want the strongest loggers to cut the most logs. But it doesn't help the smartest scientists do more science. Science just doesn't work that way. That's why we are transitioning from picies (age of mass production) to aquarius (age of resource mangement). Why will our children have to carry their own water?