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Is the market really that dumb? I'm increasingly thinking about becoming an active investor.

Karrot_Kream 3y ago
Sophisticated money is generally not. The average retail investor absolutely is. Most retail investors invest based on emotion not on fact. A lot of tech company employees justify their emotions as providing them an edge because they're in the industry, but they often likewise get hung up on factors that they find emotionally relevant but aren't actually market relevant factors. Look at this other comment https://news.ycombinator.com/item?id=39222007 https://news.ycombinator.com/item?id=39222007 in this thread. A lot of it is just idle speculation based on the commenter's personal values. These are the analyses that drive retail investors to invest. I don't mean to pick on this commenter specifically; I just felt it to be very illustrative of the kind of analysis that the average tech person does to justify or not justify an investment.
- RivieraKid 3y ago
  The question is how smart is the break-even investor, i.e. the person I have to beat to win in this game.
- cqqxo4zV46cp 3y ago
  “Techies aren’t as smart as they think they are” is always something that I’ll happily get behind.
  - wkat4242 3y ago
    I think we're plenty smart for real. But where we go wrong is thinking that our tech smarts translate to other fields like finance. Personally I know it's one of my weak spots so I stay far far from investments.
paulpauper 3y ago
Had a decade ago you bought and held the FAMNG index of companies, you would have beat pretty much every hedge fund and active manager, save for Renaissance Technologies....
- Karrot_Kream 3y ago
  Hindsight is 20-20 though. If you had bought Apple at the trough, you would have done fabulously well.
  - houseatrielah 3y ago
    Some people have foresight. He made $500m. https://www.amazon.com/Mobile-Wave-Intelligence-Change-Everything/dp/B00CW66C48 https://www.amazon.com/Mobile-Wave-Intelligence-Change-Every...
purple_ferret 3y ago
Investing is about reading the facts, not the tea leaves. Sometimes the facts aren't enough to predict the future. See Bill Ackman trying to catch Netflix falling and exiting at a loss soon after: https://variety.com/2022/digital/news/bill-ackman-sells-netflix-stake-loss-1235237715/ https://variety.com/2022/digital/news/bill-ackman-sells-netf...

Sophisticated money is generally not. The average retail investor absolutely is. Most retail investors invest based on emotion not on fact. A lot of tech company employees justify their emotions as providing them an edge because they're in the industry, but they often likewise get hung up on factors that they find emotionally relevant but aren't actually market relevant factors. Look at this other comment https://news.ycombinator.com/item?id=39222007 https://news.ycombinator.com/item?id=39222007 in this thread. A lot of it is just idle speculation based on the commenter's personal values. These are the analyses that drive retail investors to invest. I don't mean to pick on this commenter specifically; I just felt it to be very illustrative of the kind of analysis that the average tech person does to justify or not justify an investment.

RivieraKid 3y ago
The question is how smart is the break-even investor, i.e. the person I have to beat to win in this game.
cqqxo4zV46cp 3y ago
“Techies aren’t as smart as they think they are” is always something that I’ll happily get behind.
- wkat4242 3y ago
  I think we're plenty smart for real. But where we go wrong is thinking that our tech smarts translate to other fields like finance. Personally I know it's one of my weak spots so I stay far far from investments.

paulpauper 3y ago

Had a decade ago you bought and held the FAMNG index of companies, you would have beat pretty much every hedge fund and active manager, save for Renaissance Technologies....

Karrot_Kream 3y ago
Hindsight is 20-20 though. If you had bought Apple at the trough, you would have done fabulously well.
- houseatrielah 3y ago
  Some people have foresight. He made $500m. https://www.amazon.com/Mobile-Wave-Intelligence-Change-Everything/dp/B00CW66C48 https://www.amazon.com/Mobile-Wave-Intelligence-Change-Every...

purple_ferret 3y ago

Investing is about reading the facts, not the tea leaves. Sometimes the facts aren't enough to predict the future. See Bill Ackman trying to catch Netflix falling and exiting at a loss soon after: https://variety.com/2022/digital/news/bill-ackman-sells-netflix-stake-loss-1235237715/ https://variety.com/2022/digital/news/bill-ackman-sells-netf...