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If they predicted the crisis, why aren't they rich? Economics has the remarkable property that if you can see the future coming better than your peers, you can
by FeepingCreature 12y ago
If they predicted the crisis, why aren't they rich?
Economics has the remarkable property that if you can see the future coming better than your peers, you can profit off it. So conversely, whenever somebody claims in retrospect that they saw the future coming it should be asked why they didn't profit.
- slavik81 12y agoThe market can stay irrational longer than you can stay solvent. Even if you can easily see the inevitable correction coming, it's difficult to say when it will happen. A powder keg still needs a spark to take.
- FeepingCreature 12y agoI want to say "if you can't see when it'll come, you're not really predicting it", but that's too easy. I wonder if there's a way to "far-short" a stock. Like, if you think the stock in question will "eventually" go up to $1k, you can buy now and sell when it does. But if you think it'll "eventually" drop to $10, you can't easily trade on that, right? Maybe the way to go is to buy everything _but_ that stock (via overlapping index funds?), then sell once the stock drops to $10 and reevaluate from there? I don't know.
- eli_gottlieb 12y ago>If they predicted the crisis, why aren't they rich? Who says they're not?
- FeepingCreature 12y agoI feel like if they got rich off predicting the crisis, they should advertise that a lot more loudly. It's the one undeniable evidence of predictive success there is in the market. Of course, that might be stupid from a PR perspective. Which is terrible.