| > I don’t take investing so seriously Then how do you know you aren't over paying for stocks? Your plan is to buy high and sell higher? > it’s worked out well for me My unvested RSUs have more than doubled in value over the past year, and ESPP has done just as well lately. The market has worked out great for everyone, especially those of us in high tech. > if I need to derisk I will make that decision at a later time. To me this reads as 'I will sell when the market drops hard enough to make me anxious.' A ton of institutional investors (think pension funds and university endowments) did exactly that, and it made them worse off in the long run. David Swensen calls that institutional strategy out as 'buy high and sell low.' IMO, buying into a down market is the real step the average person is unwilling to do, even though it's incredibly easy implement: sell off your winners and buy more of your losers. If you have something more complicated in mind, I just am not ready to believe someone unwilling to bother calculating the present value of forecasted future earnings is bothering with looking at their Sharpe ratio and deciding 'welp, time to buy some VIX to offset this risk.' > Again, I just thinking screaming “anything except index funds is stupid gambling and irresponsible” is untrue. Even if you don't accept the premise (I don't[1]), doesn't mean active investors are a priori smart. I have yet to speak with anyone upset by the index investing philosophy I consider prepared. [1]: There are clearly people who make a living doing this who dig far beyond financial statements. Random example I know of from a lecture given at Yale by a trader (https://www.youtube.com/watch?v=DMbhgSBIUfk&t=3875s if you can stomach the umms and ahs) reading Bond contracts ("indentures") and looking for companies that were likely to delay financial statements and owed bondholders par immediately. One such notable source of delayed financials was backdated options, and this exact accounting irregularities even affected the tech giant you mentioned, back in 2007. You may recall another facet of this story from HN favorite 'Why I did not go to jail' (https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/) as this was widely practiced at the time. |
I consider active investing to be a hobby. I get a kick out of seeing earnings reports come in from companies I'm invested in. Again, I've dramatically outperformed SPY over 10 years and the gains have nearly secured my retirement as someone in his early 30s.
I occasionally hedge with SPY puts or gold calls if I think we are in an actual correction. If it's sustained I would do that over selling.