Hacker News new | ask | show | jobs
by vsareto 2084 days ago
>but there’s a never ending supply of people who think they can beat the odds and investors who want to believe.

Based on how the stock market didn't die during the pandemic vs. how many people lost their jobs, I'd say they are right to believe that.
2 comments
shawnz 2084 days ago
You are talking about a different issue (correlation between the stock market and the economy). The person you are replying to is talking about active versus passive investment (i.e. betting on individual stocks to beat the market rather than investing in total market index funds)
link
vsareto 2084 days ago
People that compare the two outcomes will decide to become new active investors that fuels what the parent to my comment is talking about
link
shawnz 2084 days ago
Why would they do that? Passive strategies also did well over the last few months.
link
vsareto 2084 days ago
If you get lucky gains starting out doing riskier things like WSB does, you might be more inclined to keep that style until you take some losses. And if you're swept up in WSB's fun, you'll probably end up taking more losses. WSB is basically an accelerant for investing psychology.
link
shawnz 2084 days ago
Sure, but what does that have to do with the pandemic or the current state of the economy? It will always be true that active investors are more likely to get "lucky" gains than passive investors. The allure of gambling isn't going to suddenly go away once the overall economy stabilizes.
link
vsareto 2084 days ago
I think the key disagreement here is that you don't agree that a stock market staying high during a pandemic due to government intervention would attract more active investors, and those active investors can make less mistakes because the stock market was staying irrationally high.

And if you're just a regular wage earner with some cash, seeing the labor market being dropped on its head, maybe this stock market thing might be a good idea to try. I mean, some people definitely bought stocks with the $1200 stimulus check. Getting into the stock market (which ended up doing unreasonably well) was a way to hedge against losing your job (which you had a higher likelihood of losing).

link
acdha 2084 days ago
Did active investors do significantly better, or did they just benefit over the short term from massive government efforts like everyone else? The real test of the market will be if Biden wins and all of the Republican “deficit hawks” wake from the coma they’ve been in for the last 4 years.

I would say it’s far too early to draw conclusions about the pandemic stock market, and certainly to say that an observation which has generally been supported by data for the last century or so is no longer valid.

link