6 ms·

The average daily volume of SPY is ~$15B. If Dell increased that by 1% so as to minimally affect the markets, he could cycle in and out of $27B over the course

The average daily volume of SPY is ~$15B. If Dell increased that by 1% so as to minimally affect the markets, he could cycle in and out of $27B over the course of a year. Diversified over several index funds, or even creating his own, he could do it much faster. That seems a lot more liquid than his current situation. I agree though, nobody gets massively rich on passive investment. You get massively rich on active schemes (whether that is via entrepreneurship or investing), and then you passively collect when the scale of your wealth grows to the point where the liquidity of passive schemes is more important.

skookumchuck 8y ago
> nobody gets massively rich on passive investment If they'd invested, say, $5m in AMZN when it opened, they'd be a billionaire today.
- haneefmubarak 8y ago
  That's active investment, in that you have to actively select Amazon and not one for the hundred other companies that listed and went nowhere.
  - skookumchuck 8y ago
    > That's active investment Nope. Buying something doesn't make it "active". Active means you are involved in managing the business. My example was buying AMZN and literally doing NOTHING with it for 20 years. It's the very definition of passive investing.
    - haneefmubarak 8y ago
      I'm sorry, but I believe you're quite mistaken with the definitions, at least as they are conventionally used (from Bloomberg [1]): > Active investing is what used to just be called investing — buying or selling individual stocks or bonds. >... > Passive investments track indexes, which are groups of securities that are alike in some way. [1]: https://www.bloomberg.com/quicktake/active-vs-passive-investing https://www.bloomberg.com/quicktake/active-vs-passive-invest...
      - skookumchuck 8y ago
        "Passive investing methods seek to avoid the fees and limited performance that may occur with frequent trading. Passive investing’s goal is to build wealth gradually. Also known as a buy-and-hold strategy, passive investing means buying a security with the intention to own it long term. Unlike active traders, passive investors do not seek to profit from short-term price fluctuations or market timing. " https://www.investopedia.com/terms/p/passiveinvesting.asp https://www.investopedia.com/terms/p/passiveinvesting.asp Besides, it doesn't make much sense to call someone an "active" investor who literally did nothing with it for 20 years. He wouldn't have even had to account for it on his taxes, as AMZN hasn't paid any dividends. With the Vanguard index fund, the IRS is going to come looking for their cut every year.

skookumchuck 8y ago

> nobody gets massively rich on passive investment If they'd invested, say, $5m in AMZN when it opened, they'd be a billionaire today.

haneefmubarak 8y ago
That's active investment, in that you have to actively select Amazon and not one for the hundred other companies that listed and went nowhere.
- skookumchuck 8y ago
  > That's active investment Nope. Buying something doesn't make it "active". Active means you are involved in managing the business. My example was buying AMZN and literally doing NOTHING with it for 20 years. It's the very definition of passive investing.
  - haneefmubarak 8y ago
    I'm sorry, but I believe you're quite mistaken with the definitions, at least as they are conventionally used (from Bloomberg [1]): > Active investing is what used to just be called investing — buying or selling individual stocks or bonds. >... > Passive investments track indexes, which are groups of securities that are alike in some way. [1]: https://www.bloomberg.com/quicktake/active-vs-passive-investing https://www.bloomberg.com/quicktake/active-vs-passive-invest...
    - skookumchuck 8y ago
      "Passive investing methods seek to avoid the fees and limited performance that may occur with frequent trading. Passive investing’s goal is to build wealth gradually. Also known as a buy-and-hold strategy, passive investing means buying a security with the intention to own it long term. Unlike active traders, passive investors do not seek to profit from short-term price fluctuations or market timing. " https://www.investopedia.com/terms/p/passiveinvesting.asp https://www.investopedia.com/terms/p/passiveinvesting.asp Besides, it doesn't make much sense to call someone an "active" investor who literally did nothing with it for 20 years. He wouldn't have even had to account for it on his taxes, as AMZN hasn't paid any dividends. With the Vanguard index fund, the IRS is going to come looking for their cut every year.