7 ms·

Jake, you say you want to help the retail investor... Then why are you only pointing them into buying individual stocks? Most are better served with a more con

Jake, you say you want to help the retail investor... Then why are you only pointing them into buying individual stocks? Most are better served with a more conservative ETF market index portfolio approach. Picking individual stocks can be part of one's portfolio at some point but it is a hard place to start.

llampx 5y ago
Guess what ETFs consist of...
- toomuchtodo 5y ago
  That’s the point. Most investors are served perfectly fine by an index fund and functional broker. That’s it. Active trading and expensive funds are your enemy as an unsophisticated investor. VTI or ITOT and chill, and as long as you have income, discipline, and an emergency fund you’ll do better than most. https://longnow.org/ideas/02018/02/09/warren-buffett-wins-million-dollar-long-bet/ https://longnow.org/ideas/02018/02/09/warren-buffett-wins-mi... https://longbets.org/362/ https://longbets.org/362/ https://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-an-index-card-of-financial-tips-isnt-enough-this-book-is-there https://www.npr.org/sections/alltechconsidered/2016/01/08/46... https://media.npr.org/assets/img/2016/01/07/index-67f786d0f1fbbf302d422c5bf30dd1624f991dac-s1200-c85.webp https://media.npr.org/assets/img/2016/01/07/index-67f786d0f1... (“Never buy or sell an individual security; the person on the other side of the table knows more than you do about that stuff.”)
  - llampx 5y ago
    My point is that ETFs by definition are a group of stocks, often grouped by sector unless talking about a whole-market ETF. For example you could have invested in SPY, or QQQ, or IWM at the bottom of the bear market in 2008, and walked away with vastly different returns on Dec 31, 2021. Those are all indexes. Even from 2020 onwards, if you had picked XLE you would have had different returns till date than if you invested in XLU or some green energy ETF, or even 2020's darling, ARKK. Just saying invest in an ETF doesn't mean anything. They are baskets of stocks, and as the macro environment changes, some ETFs will perform better than others. In effect, even an all-encompassing ETF (VTI?) will only perform well in a bull market. Just because we've been in a decades-long bull market doesn't mean stocks will keep going up forever. Is the answer stock picking? Absolutely not. However, ETFs are not the "practically risk-free return" they are sometimes billed as.
    - toomuchtodo 5y ago
      Entry and exit points are material, but you don’t know when to enter and exit to maximize profit, hence “time in the market beats timing the market.” On average, you should come out ahead (based on available data and back testing). These are well worn passive capital market investment principles, with copious amounts of supporting data. As an individual, it is very difficult to do better than long duration broad equities basket exposure with a low expense ratio.
- smt88 5y ago
  "Exposure to stocks" is not the problem. Thinking you know which stocks to pick is the problem. Robots and random chance are better than human intuition, partly because of institutional manipulation of markets.
  - llampx 5y ago
    I disagree with the proposition that it is impossible to pick good companies. Anyone with half a brain could have invested in AMD as Zen 1 and Zen 2 came out, and the writing was on the wall for Intel. Same goes for other industries, if you are willing to do your homework and manage your risk.
    - hippofluff 5y ago
      this^ 100% The companies and corporations that sell investment vehicles and services try to "make it cool/funny" to not understand money and that "rich people have their wealth managed for them", a bunch of bologne! That being said, it's not simple, and people need to be serious about investing, it's very easy to get burned without the proper education/patience
    - smt88 5y ago
      It's easy to invest in a single stock that goes up in the longest bull market in US history. It is much harder to beat the market, especially in a bear market. The core tenet of investing is that you make a bet that other people see as risky. We have enormous amounts of research that active investing at an individual level can no longer beat the market in the face of widespread insider trading at the investor level, HFT, etc. You need asymmetrical information to beat the market, and individuals just can't get it.
      - llampx 5y ago
        > It is much harder to beat the market, especially in a bear market. This is the crux of the Warren Buffet vs Hedge Fund bet, and why it failed. Buffet quite possibly realized that a new bull market was about to begin, and the market would beat a hedge fund. When the bull market ends though, let's see if hedge funds don't start beating the market with their long-short-cash strategy. I am nowhere near hedge fund territory, but do have some qualms about whether this bull market will just grow to the sky or have a big reset sometime quite soon, quite possibly reaching 6000 on the S&P before that. Also, I find the efficient market hypothesis quite bullshit, so there's that.
hippofluff 5y ago
Hi! I agree 100% that stocks are not the only investment vehicle, and you're right it's not meant for everyone to buy. Also, we are developing support for viewing ETFs as I type this (well, Nick is today). Which will be released in the next couple weeks. Our MVP here, is built around communities of people who want to learn more about stocks, as well as get better research tools than what they use currently. We do not have any intention of pushing people to buy anything, the "vibe" is moreso giving as much information and education as possible, which we believe/are seeing will lead to people making more confident informed decisions with their capital. Whether that's buying stocks, or something else, no skin off our back. This is a great topic :)
- CoffeeOnWrite 5y ago
  Curious for you to go a bit further here. I’d argue two links [0] [1] have all the info a regular person needs to make prudent investment decisions. Why do regular people need your research tools? More pointedly, and I ask this as someone completely unfamiliar with Daniel’s content, but does Daniel claim to beat the market or that his audience could beat the market? If so, there’s a moral hazard here, in the opinion of folks like myself that believe such advice is fairly dangerous. [0] http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf [1] https://www.bogleheads.org/wiki/Three-fund_portfolio https://www.bogleheads.org/wiki/Three-fund_portfolio
  - hippofluff 5y ago
    Hi! Sry for the lag on the reply here, I didn't have time to read those through fully but I skimmed both. I want to make one thing super clear, we don't make money off users trading, we are an investment/analysis tool and we make no claims/would never be a predatory entity that makes claims of x% returns/anything like that. We genuinely care about educating our users, and then letting them make their own decisions. As for the links you sent (thanks for that btw!) I would bucket this with a bulk of the education out there, that's existed for a while, but hasn't been solving the financial literacy issue. The reason we believe this is the case is that education you sent is boring/static white text. Most people in the younger generations just don't learn that way. Further that education isn't inlined/when you need it while looking at financials. A lot of our users/the founders find it much easier/more inviting/more fun & interactive to learn with the "clicky" ? modules we embed inline all over the site to define everything in small chunks. We are finding this is a way to learn where you actually remember things, but more importantly are engaged/having fun learning it. We have yet to see a tool besides ours to execute on this properly since it's very hard to create a consumer product that makes learning investing easy. Most importantly noobies feel comfortable in our tool, 99% of people who are brand new to investing get scared to death and never start when sent 20+ 10pt size font articles. Lastly, my point isn't to say those resources aren't great, they are. But statistically people will just not read that, and/or not internalize it since it's not being applied when they need it while researching numbers/S1 filings/SEC reports/etc
wnolens 5y ago
He can't decide for people what the best course of action is, only give them to tools if they wish to go down this rabbit hole. It's meant for the financially mostly-literate and curious, not your mom/dad. It's for everyone who watches Jim Cramer.
- recursive 5y ago
  So this isn't meant to get people to the point of being mostly-literate? Like what even is a stock and how do they work?
searchableguy 5y ago
For anyone looking for investment resource targeted towards Indian Market. https://indiainvestments.wiki https://indiainvestments.wiki is the best resource and free for anyone to contribute to. Most people don't need to research individual stocks as OP said. They should learn about XIRR, excel, risk and portfolio management (which will cover insurance, emergency fund, expense management), and different types of investment instruments. The wiki covers all of it and answers frequently asked questions related to Indian Market. Everyone push toward trading individual stocks because it's profitable for businesses. Brokerage earn more money through those trades whereas many AMC which manage direct funds lose money on transaction cost in initial years and only make up for it via other side income. It is the case in India.

llampx 5y ago

Guess what ETFs consist of...

toomuchtodo 5y ago
That’s the point. Most investors are served perfectly fine by an index fund and functional broker. That’s it. Active trading and expensive funds are your enemy as an unsophisticated investor. VTI or ITOT and chill, and as long as you have income, discipline, and an emergency fund you’ll do better than most. https://longnow.org/ideas/02018/02/09/warren-buffett-wins-million-dollar-long-bet/ https://longnow.org/ideas/02018/02/09/warren-buffett-wins-mi... https://longbets.org/362/ https://longbets.org/362/ https://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-an-index-card-of-financial-tips-isnt-enough-this-book-is-there https://www.npr.org/sections/alltechconsidered/2016/01/08/46... https://media.npr.org/assets/img/2016/01/07/index-67f786d0f1fbbf302d422c5bf30dd1624f991dac-s1200-c85.webp https://media.npr.org/assets/img/2016/01/07/index-67f786d0f1... (“Never buy or sell an individual security; the person on the other side of the table knows more than you do about that stuff.”)
- llampx 5y ago
  My point is that ETFs by definition are a group of stocks, often grouped by sector unless talking about a whole-market ETF. For example you could have invested in SPY, or QQQ, or IWM at the bottom of the bear market in 2008, and walked away with vastly different returns on Dec 31, 2021. Those are all indexes. Even from 2020 onwards, if you had picked XLE you would have had different returns till date than if you invested in XLU or some green energy ETF, or even 2020's darling, ARKK. Just saying invest in an ETF doesn't mean anything. They are baskets of stocks, and as the macro environment changes, some ETFs will perform better than others. In effect, even an all-encompassing ETF (VTI?) will only perform well in a bull market. Just because we've been in a decades-long bull market doesn't mean stocks will keep going up forever. Is the answer stock picking? Absolutely not. However, ETFs are not the "practically risk-free return" they are sometimes billed as.
  - toomuchtodo 5y ago
    Entry and exit points are material, but you don’t know when to enter and exit to maximize profit, hence “time in the market beats timing the market.” On average, you should come out ahead (based on available data and back testing). These are well worn passive capital market investment principles, with copious amounts of supporting data. As an individual, it is very difficult to do better than long duration broad equities basket exposure with a low expense ratio.
smt88 5y ago
"Exposure to stocks" is not the problem. Thinking you know which stocks to pick is the problem. Robots and random chance are better than human intuition, partly because of institutional manipulation of markets.
- llampx 5y ago
  I disagree with the proposition that it is impossible to pick good companies. Anyone with half a brain could have invested in AMD as Zen 1 and Zen 2 came out, and the writing was on the wall for Intel. Same goes for other industries, if you are willing to do your homework and manage your risk.
  - hippofluff 5y ago
    this^ 100% The companies and corporations that sell investment vehicles and services try to "make it cool/funny" to not understand money and that "rich people have their wealth managed for them", a bunch of bologne! That being said, it's not simple, and people need to be serious about investing, it's very easy to get burned without the proper education/patience
  - smt88 5y ago
    It's easy to invest in a single stock that goes up in the longest bull market in US history. It is much harder to beat the market, especially in a bear market. The core tenet of investing is that you make a bet that other people see as risky. We have enormous amounts of research that active investing at an individual level can no longer beat the market in the face of widespread insider trading at the investor level, HFT, etc. You need asymmetrical information to beat the market, and individuals just can't get it.
    - llampx 5y ago
      > It is much harder to beat the market, especially in a bear market. This is the crux of the Warren Buffet vs Hedge Fund bet, and why it failed. Buffet quite possibly realized that a new bull market was about to begin, and the market would beat a hedge fund. When the bull market ends though, let's see if hedge funds don't start beating the market with their long-short-cash strategy. I am nowhere near hedge fund territory, but do have some qualms about whether this bull market will just grow to the sky or have a big reset sometime quite soon, quite possibly reaching 6000 on the S&P before that. Also, I find the efficient market hypothesis quite bullshit, so there's that.

hippofluff 5y ago

Hi! I agree 100% that stocks are not the only investment vehicle, and you're right it's not meant for everyone to buy. Also, we are developing support for viewing ETFs as I type this (well, Nick is today). Which will be released in the next couple weeks. Our MVP here, is built around communities of people who want to learn more about stocks, as well as get better research tools than what they use currently. We do not have any intention of pushing people to buy anything, the "vibe" is moreso giving as much information and education as possible, which we believe/are seeing will lead to people making more confident informed decisions with their capital. Whether that's buying stocks, or something else, no skin off our back. This is a great topic :)

CoffeeOnWrite 5y ago
Curious for you to go a bit further here. I’d argue two links [0] [1] have all the info a regular person needs to make prudent investment decisions. Why do regular people need your research tools? More pointedly, and I ask this as someone completely unfamiliar with Daniel’s content, but does Daniel claim to beat the market or that his audience could beat the market? If so, there’s a moral hazard here, in the opinion of folks like myself that believe such advice is fairly dangerous. [0] http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf [1] https://www.bogleheads.org/wiki/Three-fund_portfolio https://www.bogleheads.org/wiki/Three-fund_portfolio
- hippofluff 5y ago
  Hi! Sry for the lag on the reply here, I didn't have time to read those through fully but I skimmed both. I want to make one thing super clear, we don't make money off users trading, we are an investment/analysis tool and we make no claims/would never be a predatory entity that makes claims of x% returns/anything like that. We genuinely care about educating our users, and then letting them make their own decisions. As for the links you sent (thanks for that btw!) I would bucket this with a bulk of the education out there, that's existed for a while, but hasn't been solving the financial literacy issue. The reason we believe this is the case is that education you sent is boring/static white text. Most people in the younger generations just don't learn that way. Further that education isn't inlined/when you need it while looking at financials. A lot of our users/the founders find it much easier/more inviting/more fun & interactive to learn with the "clicky" ? modules we embed inline all over the site to define everything in small chunks. We are finding this is a way to learn where you actually remember things, but more importantly are engaged/having fun learning it. We have yet to see a tool besides ours to execute on this properly since it's very hard to create a consumer product that makes learning investing easy. Most importantly noobies feel comfortable in our tool, 99% of people who are brand new to investing get scared to death and never start when sent 20+ 10pt size font articles. Lastly, my point isn't to say those resources aren't great, they are. But statistically people will just not read that, and/or not internalize it since it's not being applied when they need it while researching numbers/S1 filings/SEC reports/etc

wnolens 5y ago

He can't decide for people what the best course of action is, only give them to tools if they wish to go down this rabbit hole. It's meant for the financially mostly-literate and curious, not your mom/dad. It's for everyone who watches Jim Cramer.

recursive 5y ago
So this isn't meant to get people to the point of being mostly-literate? Like what even is a stock and how do they work?

searchableguy 5y ago

For anyone looking for investment resource targeted towards Indian Market. https://indiainvestments.wiki https://indiainvestments.wiki is the best resource and free for anyone to contribute to. Most people don't need to research individual stocks as OP said. They should learn about XIRR, excel, risk and portfolio management (which will cover insurance, emergency fund, expense management), and different types of investment instruments. The wiki covers all of it and answers frequently asked questions related to Indian Market. Everyone push toward trading individual stocks because it's profitable for businesses. Brokerage earn more money through those trades whereas many AMC which manage direct funds lose money on transaction cost in initial years and only make up for it via other side income. It is the case in India.