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What I want to know is whether people who believe in a bubble actually short AI/tech-related stocks.

ng12 1y ago
Usually not, because shorting a broad chunk of market is very hard. "Markets can remain irrational longer than you can remain solvent".
- sitzkrieg 1y ago
  or you could sell a single broad market etf lol. or buy a short etf.. it hasn't been hard to selectively exposure yourself to dang near any slice of equities since the ETF boom
  - ng12 1y ago
    Short ETFs are usually leveraged and make for a really good way to lose money. Realistically, timing is the issue. "This is a bubble" is worth ~nothing. "This is a bubble and it will pop in late December" is worth a lot if you're correct.
    - sitzkrieg 1y ago
      the question was of exposure, not timing.
lelanthran 1y ago
> What I want to know is whether people who believe in a bubble actually short AI/tech-related stocks. Why? What does that tell you?
- ThrowawayTestr 1y ago
  The common phrase is "putting one's money where their mouth is"
  - Yizahi 1y ago
    So, every single human opinion must be followed up with a real money gambling bet or it is meaningless?
    - ThrowawayTestr 1y ago
      If you predicted next week's lottery numbers, I'd be very suspicious if you didn't buy a ticket
      - lelanthran 1y ago
        > If you predicted next week's lottery numbers, I'd be very suspicious if you didn't buy a ticket But that is not what is happening here, is it? If you were able to predict a lotto number that has a high probability of appearing within the next 24 months, but each ticket cost $2000 to buy, would you still be suspicious? I find that the people of the opinion "If you think this is a bubble, why aren't you shorting it" don't really have much of a grounding in statistics, especially with regard to EV. I also find it odd that so many people saying "Why don't you short it" have never heard "The market can remain irrational longer than you can remain solvent."
  - deleted 1y ago
    [deleted]
- brippalcharrid 1y ago
  Stated preference vs. revealed preference
Esophagus4 1y ago
On a more degenerate forum, the policy you’re referring to would be “positions or ban”
- givemeethekeys 1y ago
  This is also why all online stock pundits are full of shit. None of them will publicly disclose their P&L's from trading because they make most of their money from YouTube and peddling courses.
Esophagus4 1y ago
Usually not - the people writing these comments have neither the understanding nor the courage of their conviction to bet based on their own analysis. If they did, the articles would look less like “wow, numbers are really big,” and more like, “disclaimer: I am short. Here’s my reasoning” They don’t even have to be short for me to respect it. Even being hedged or on the sidelines I would understand if you thought everything was massively overvalued. It’s a bit like saying you think the rapture is coming, but you’re still investing in your 401k… Edit: sorry to respond to this comment twice. You just touched on a real pet peeve of mine, and I feel a little like I’m the only one who thinks this way, so I got excited to see your comment
- Terr_ 1y ago
  That sounds like a variation on: "If you're so smart, why aren't you rich?" which rests on some very shaky (yet comforting) set of assumptions in a "just world." Heck, just look at yesterday: Myself and several million other people wouldn't have needed to march if smart people reliably ended up in charge. I think it's more valuable to flip the lens around, and ask: "If you're so rich, why aren't you smart?"
  - Esophagus4 1y ago
    Fair point - meaning, you can be right (and rich) but for the wrong reasons? Like… you can place your bet based on a coin flip and get it right without actually being smart?
    - Terr_ 1y ago
      > based on a coin flip To simplify: Yes. While it seems foolish to discount all effect from individual agency or merit, we do know that random chance is sufficient to lead to the trends we see. [0] Much like how an iceberg always has some ~10% portion above the water: The top water molecules probably aren't special snowflakes (heh) compared to the rest, we're mostly just seeing What Ice Does. Combine that with how humans seem hardwired to dislike/ignore random chance, and it's reasonable to think we overestimate the importance of personal qualities in getting rich. Consider how basically anyone flipping a coin starts thinking of of causal stories like "hot streaks" or "cold streaks" or "now I'm overdue for a different outcome", even when they already know it's 50/50. ________________ A simple trading simulation of equally-smart equally-lucky agents still demonstrates oligarchic outcomes [0]. When you also add a redistributing effect (like taxing the rich to keep the poor alive) it generates outcomes that resemble real-world statistics for different countries. > If you simulate this economy, a variant of the yard sale model, you will get a remarkable result: after a large number of transactions, one agent ends up as an “oligarch” holding practically all the wealth of the economy, and the other 999 end up with virtually nothing. > It does not matter how much wealth people started with. It does not matter that all the coin flips were absolutely fair. It does not matter that the poorer agent's expected outcome was positive in each transaction, whereas that of the richer agent was negative. Any single agent in this economy could have become the oligarch—in fact, all had equal odds if they began with equal wealth. [0] https://www.scientificamerican.com/article/is-inequality-inevitable/ https://www.scientificamerican.com/article/is-inequality-ine...
AndrewDucker 1y ago
I moved my pension in to an index that doesn't include the big AI companies.
- AviationAtom 1y ago
  The whole market was propped up by AI stocks though. So realistically you'd have to move out of the markets to avoid exposure.
Yizahi 1y ago
Market bubble is essentially a gambling event gone wrong. Shorting stock is widely recognized by people smarter than me, as high risk gambling, due multiple factors. So now please tell me, why would people concerned about gambling gone wrong, voluntarily engage in a reverse gambling themselves? Let imagine football and a spectator who is moderately in the know about this sport. He sees that multiple people are gambling large sums on the team he deems would likely lose. Why would such a person go and bet unreasonable sums on the opposite team, even if it's a likely win? It's still gambling and still not a reasonably defined event. tl;dr - it is really tiring, reading these "clever" quips about "why won't you short then?", mainly because they are neither clever nor in any way new. We have heard that for a decade about "why won't you short BTC them?". You are not original.
- deleted 1y ago
  [deleted]
paulpauper 1y ago
They do and the majority lose everything. The few winners who happen to time the top are praised for their genius.
AviationAtom 1y ago
It's a bit hard to short private companies, of which most AI companies have chosen to remain, to avoid scrutiny from shareholders.
brazukadev 1y ago
I'm against sporting bets, should I bet against it?
sph 1y ago
I feel any naive question about investing ever can be answered with "markets can remain irrational longer than you can remain solvent" The bubble is the manifestation of this concept. Things should be falling apart, yet they keep going up, for longer than it is reasonable; at some point, bearish investors lose so much money they decide it's better just to ride the wave up, growing the bubble even further, until it bursts and everybody loses. There is a reason investors flock to gold during these times. The best move is not to play (though you don't want to hold too much cash either)
dragonwriter 1y ago
"I believe this is a bubble and it will pop" and "I believe this is a bubble and it will pop and I believe I can time it well enough to be worth putting money on when it will pop" Are...not the same belief.

ng12 1y ago

Usually not, because shorting a broad chunk of market is very hard. "Markets can remain irrational longer than you can remain solvent".

sitzkrieg 1y ago
or you could sell a single broad market etf lol. or buy a short etf.. it hasn't been hard to selectively exposure yourself to dang near any slice of equities since the ETF boom
- ng12 1y ago
  Short ETFs are usually leveraged and make for a really good way to lose money. Realistically, timing is the issue. "This is a bubble" is worth ~nothing. "This is a bubble and it will pop in late December" is worth a lot if you're correct.
  - sitzkrieg 1y ago
    the question was of exposure, not timing.

lelanthran 1y ago

> What I want to know is whether people who believe in a bubble actually short AI/tech-related stocks. Why? What does that tell you?

ThrowawayTestr 1y ago
The common phrase is "putting one's money where their mouth is"
- Yizahi 1y ago
  So, every single human opinion must be followed up with a real money gambling bet or it is meaningless?
  - ThrowawayTestr 1y ago
    If you predicted next week's lottery numbers, I'd be very suspicious if you didn't buy a ticket
    - lelanthran 1y ago
      > If you predicted next week's lottery numbers, I'd be very suspicious if you didn't buy a ticket But that is not what is happening here, is it? If you were able to predict a lotto number that has a high probability of appearing within the next 24 months, but each ticket cost $2000 to buy, would you still be suspicious? I find that the people of the opinion "If you think this is a bubble, why aren't you shorting it" don't really have much of a grounding in statistics, especially with regard to EV. I also find it odd that so many people saying "Why don't you short it" have never heard "The market can remain irrational longer than you can remain solvent."
- deleted 1y ago
  [deleted]
brippalcharrid 1y ago
Stated preference vs. revealed preference

Esophagus4 1y ago

On a more degenerate forum, the policy you’re referring to would be “positions or ban”

givemeethekeys 1y ago
This is also why all online stock pundits are full of shit. None of them will publicly disclose their P&L's from trading because they make most of their money from YouTube and peddling courses.

Esophagus4 1y ago

Usually not - the people writing these comments have neither the understanding nor the courage of their conviction to bet based on their own analysis. If they did, the articles would look less like “wow, numbers are really big,” and more like, “disclaimer: I am short. Here’s my reasoning” They don’t even have to be short for me to respect it. Even being hedged or on the sidelines I would understand if you thought everything was massively overvalued. It’s a bit like saying you think the rapture is coming, but you’re still investing in your 401k… Edit: sorry to respond to this comment twice. You just touched on a real pet peeve of mine, and I feel a little like I’m the only one who thinks this way, so I got excited to see your comment

Terr_ 1y ago
That sounds like a variation on: "If you're so smart, why aren't you rich?" which rests on some very shaky (yet comforting) set of assumptions in a "just world." Heck, just look at yesterday: Myself and several million other people wouldn't have needed to march if smart people reliably ended up in charge. I think it's more valuable to flip the lens around, and ask: "If you're so rich, why aren't you smart?"
- Esophagus4 1y ago
  Fair point - meaning, you can be right (and rich) but for the wrong reasons? Like… you can place your bet based on a coin flip and get it right without actually being smart?
  - Terr_ 1y ago
    > based on a coin flip To simplify: Yes. While it seems foolish to discount all effect from individual agency or merit, we do know that random chance is sufficient to lead to the trends we see. [0] Much like how an iceberg always has some ~10% portion above the water: The top water molecules probably aren't special snowflakes (heh) compared to the rest, we're mostly just seeing What Ice Does. Combine that with how humans seem hardwired to dislike/ignore random chance, and it's reasonable to think we overestimate the importance of personal qualities in getting rich. Consider how basically anyone flipping a coin starts thinking of of causal stories like "hot streaks" or "cold streaks" or "now I'm overdue for a different outcome", even when they already know it's 50/50. ________________ A simple trading simulation of equally-smart equally-lucky agents still demonstrates oligarchic outcomes [0]. When you also add a redistributing effect (like taxing the rich to keep the poor alive) it generates outcomes that resemble real-world statistics for different countries. > If you simulate this economy, a variant of the yard sale model, you will get a remarkable result: after a large number of transactions, one agent ends up as an “oligarch” holding practically all the wealth of the economy, and the other 999 end up with virtually nothing. > It does not matter how much wealth people started with. It does not matter that all the coin flips were absolutely fair. It does not matter that the poorer agent's expected outcome was positive in each transaction, whereas that of the richer agent was negative. Any single agent in this economy could have become the oligarch—in fact, all had equal odds if they began with equal wealth. [0] https://www.scientificamerican.com/article/is-inequality-inevitable/ https://www.scientificamerican.com/article/is-inequality-ine...

AndrewDucker 1y ago

I moved my pension in to an index that doesn't include the big AI companies.

AviationAtom 1y ago
The whole market was propped up by AI stocks though. So realistically you'd have to move out of the markets to avoid exposure.

Yizahi 1y ago

Market bubble is essentially a gambling event gone wrong. Shorting stock is widely recognized by people smarter than me, as high risk gambling, due multiple factors. So now please tell me, why would people concerned about gambling gone wrong, voluntarily engage in a reverse gambling themselves? Let imagine football and a spectator who is moderately in the know about this sport. He sees that multiple people are gambling large sums on the team he deems would likely lose. Why would such a person go and bet unreasonable sums on the opposite team, even if it's a likely win? It's still gambling and still not a reasonably defined event. tl;dr - it is really tiring, reading these "clever" quips about "why won't you short then?", mainly because they are neither clever nor in any way new. We have heard that for a decade about "why won't you short BTC them?". You are not original.

deleted 1y ago
[deleted]

paulpauper 1y ago

They do and the majority lose everything. The few winners who happen to time the top are praised for their genius.

AviationAtom 1y ago

It's a bit hard to short private companies, of which most AI companies have chosen to remain, to avoid scrutiny from shareholders.

brazukadev 1y ago

I'm against sporting bets, should I bet against it?

sph 1y ago

I feel any naive question about investing ever can be answered with "markets can remain irrational longer than you can remain solvent" The bubble is the manifestation of this concept. Things should be falling apart, yet they keep going up, for longer than it is reasonable; at some point, bearish investors lose so much money they decide it's better just to ride the wave up, growing the bubble even further, until it bursts and everybody loses. There is a reason investors flock to gold during these times. The best move is not to play (though you don't want to hold too much cash either)

dragonwriter 1y ago

"I believe this is a bubble and it will pop" and "I believe this is a bubble and it will pop and I believe I can time it well enough to be worth putting money on when it will pop" Are...not the same belief.