[dvt]

This article is fantastic. I think "get rich quick" schemes are so much worse when it comes to my generation and beyond (millennials/gen-z). People have been endlessly screwed over: graduated college during the 2008 economic bust, lived with parents until their 30s, fired/laid off during the 2020 pandemic -- so I fundamentally understand the mirage of Instagram fame and endless sacks of money for doing basically nothing of value. For a classic example, just look at /r/wallstreetbets -- young people are frustrated because there's no end to this tunnel.

It also makes things harder for those of us that don't want to run Ponzi schemes: How does one break out when everyone's taking glamorous selfies in Thailand but I'm working in a dingy apartment trying to build the next big app?

It's a tough situation on all sides with no obvious solutions.

[coldtea]

>How does one break out when everyone's taking glamorous selfies in Thailand but I'm working in a dingy apartment trying to build the next big app?

Isn't the idea of building the "next big app" itself based on the same kind of get-rich-quick mindset those schemes are exploiting?

Only except for the "nomad lifestyle" or "selling courses", etc, it's supposed to happen by coding in a dingy apartment. But it's equally unlikely, and too starry-eyed, the tech nerd version of the kind of dream the stereotypical bus-arriving Midwestern teenagers had of "becoming famous in Los Angeles".

How about merely building a business? Think small indie developer or Basecamp at best, vs Facebook and Amazon.

[solotronics]

I write software because I have always liked computers and always spent all my free time figuring out coding, linux, networking, and hacking in general. I don't expect to become the next Zuckerberg and I think that's the equivalent of telling kids they can make it in professional sports. I'm just content making a comfortable living building systems for someone else.

I think I could have made roughly as good of a living being a plumber, an electrician, or a welder! A good electrician around here makes 150k a year. I think the best career advice I heard was pick something you can stand doing and work as hard as you can at it, try and be as good as you can, not measured against someone else but for your self. If you pick a career where expertise matters and it has demand and you work harder and smarter than other people you will do fine.

[smabie]

The thing is, some people don't want to do well and merely be part of the upper middle class. Some people want to get rich. And the strategies you must employ to be comfortable are much different than those required to make serious money.

Different strokes, different folks.

[saiya-jin]

That's naive and unexperienced view on life values and true achievements.

These days, money isn't impressive. What you actually do in your life is. For some of it, some amount of money is important, and if you have plenty its easier to achieve. But that's about it. I live in place swarming with rich folks, both old rich and new rich, while being neither. Most of them live such boring lives it would be sad if I cared for them. Never once met one of them that I would want to swap my adventurous life with. Had to go through a bit of hardship to get where I am obviously but not that much.

What I want to say - striving to get rich from the start is a stupid strategy of a clueless person. Be good at something you do, and more importantly be good at living a great life, being a good kind person. Being rich becomes just a gimmick, whether it happens or not.

[yakireev]

> I live in place swarming with rich folks, both old rich and new rich, while being neither. Most of them live such boring lives it would be sad if I cared for them.

I was half-expecting the next sentence to be "Sign up for my webinar and I'll teach you how to make your life as fun as mine!"

Seriously though, what do you mean by "adventurous life"?

[alasdair_]

> Seriously though, what do you mean by "adventurous life"?

If the post you were replying to wasn’t composed while skydiving above shark-infested waters with a supermodel by their side, I’m going to be terribly disappointed.

[saiya-jin]

Low-cost backpacking in 3rd world (obviously not during covid), hiking, alpinism, climbing, via ferratas, ski touring/alipinism, skiing, paragliding, diving... plus some more usual sports/activities like biking, running, swimming.

It doesn't have to be that many (which is hard to manage with 100% employment), even 1 would suffice if done properly. I have a kid now, second possibly on the way, so even without covid some of this is/will be massively scaled down. But I still want to pick up new ones - right now its precision target shooting and archery.

Its more about mindset - if you feel you have a great life, money is just a tool to keep it. For that you don't need terribly much, heck some full time climbers live in camper vans for the whole time. On the other hand if you don't enjoy your life, money won't make it magically better, sometimes the opposite.

And no I don't sell some stupid coaching :) Those are just my own experiences

[remarkEon]

I probably should’ve become a fisherman then.

[cbozeman]

> How about merely building a business?

More people need to be told this.

The combination of work ethic, of risk tolerance, and of perseverance against ridiculous odds that is required to build a Tesla, or an Apple, or a Whatever, is extraordinarily rare

[coldtea]

I'd say the combo of "work ethic, risk tolerance, and perseverance against ridiculous odds" involved in Tesla/Apple/etc, is orders of magnitude more commonly found than actual Tesla/Apple/etc level success...

[goatinaboat]

I'd say the combo of "work ethic, risk tolerance, and perseverance against ridiculous odds" involved in Tesla/Apple/etc, is orders of magnitude more commonly found than actual Tesla/Apple/etc level success...

Agreed. For every tech millionaire there are a thousand guys who are just as smart and worked just as hard and it didn’t work out for whatever reason. Maybe their timing was off by a mere 6 months for example. There’s a lot of survivorship bias in what is in large part a lottery.

[zimpenfish]

> Maybe their timing was off by a mere 6 months for example.

First job I had (1995) was "Classified Ads on the Internet" - back then it was expensive to host a website and hugely expensive to add CGI (I think Demon wanted maybe £300 a month for that?) and the money ran out after a year. If they'd been able to keep it funded for, say, another 2-3 years, until home internet was more accessible, I think they'd have been in a pretty good position to own UK classifieds on the web (at least for a while.)

[rjyoungling]

Webvan vs. Instacart. So many dead startups that are brought back because they were just too soon.

[andrepd]

You forgot two factors: capital (which excludes the vast majority of people om earth), and an enormous amount of luck.

[closeparen]

It's pretty easy for a technology business to get capital these days.

[mguerville]

It’s not that easy, even in SV and within my batch at 500 startups (arguably one of the better credentials a startup can have at an early stage) the struggle to raise was real. And then back in the Midwest a lot of startups I’ve advised have had a hell of a time raising.

If you aren’t well connected or hyper credentialed (or if you’re a minority founder), raising capital is very hard. It’s easier than it’s ever been, but it’s not « easy »

[rorykoehler]

I don't want that capital though. All it's doing is ossifying the power structures that are the cause of the major problems we are facing. It's a trap.

[andrepd]

Indeed. Who are these people, why do they get to decide what gets built and what do people labour on? I want democratisation of capital.

[wwweston]

I'm all ears.

[closeparen]

Check the footer of the website you’re on right now? The whole thing is content marketing for an offering of capital.

[coliveira]

Tesla was built by a billionaire. There was little to no risk involved.

[cbozeman]

Musk had about $140 million when he ~started~ bought (sorry) Tesla. That's a pretty far cry from a billion. On top of that, there was no guarantee that electric cars would ever be embraced, especially by Americans, who traditionally, love ICE muscle cars.

[coldtea]

>On top of that, there was no guarantee that electric cars would ever be embraced, especially by Americans, who traditionally, love ICE muscle cars.

Generous subsidies for electrics in the US and other countries helped with that.

Like generous government money funnelled through NASA contracts helped Space X repeat what NASA did in the late 60s/early 70s, slightly improved, 40 years later...

[coryrc]

Yes, I remember when NASA was launching reusable rockets as regular supply missions and weren't using 5% GDP, and did such a great job they didn't end up giving $400MM/year to Russia to hitch rides on the Soyuz for the last decade.

[samatman]

Yeah, just look at all the other profitable companies in the space which did it too!

Can't turn around without bumping into an electric car / reusable rocket company these days.

[bigbubba]

140 million is a lot closer to a billion (7x) than most people are to 140 million (>140x.)

[wincy]

Additionally, during the 2008 financial collapse Elon Musk took the last of his personal fortune and put it back into Tesla. The company very likely would have folded if he hadn’t put up his own money, and Elon Musk would have no longer been worth very much at all.

[symlinkk]

Once you get past a few million dollars, the extra money is just bargaining power and losing it doesn’t affect your day to day quality of life

[sergefaguet]

Lol you clearly are mistaken about how human emotions and happiness works

[just-juan-post]

Tesla was built by someone else and was purchased by a young man who grew up rich and insisted that as part of the transaction that his title be founder.

[throwawaysea]

Grew up rich? I don't think that's accurate. I know a lot of Musk-hating articles have been played up, particularly on socialist Twitter circles, alleging that Musk inherited family wealth from an emerald mine. But this is simply not true. The emerald mine story is dubious and vague, and it's only real mention is from Ashlee Vance's book on Musk, and her source is Elon's father. Elon and his mother fled an allegedly abusive relationship with the father, and had nothing in terms of wealth. It's why Elon had to work odd jobs after moving (https://www.cnbc.com/2020/01/03/odd-jobs-elon-musk-had-when-...).

[coliveira]

It is well know that Elon's father is a successful owner of an engineering company in South Africa. If something was missing in his youth it was not money. Of course, his father being rich didn't immediately translate into personal wealth for him, that's why these people like to claim that they are "self made".

[icapulet2]

Elon later got thousands of dollars from his dad to start Zip2 so it's not like he ran away without a safety net. He did what so many other trust fund babies have done: He slummed. Stop contributing to the Horatio Algers narrative that Musk spins, among hundreds of other yarns,

[seibelj]

This whole comment thread is hilarious. “Oh tesla, no big deal, anyone could have made it including me if I just had the same capital.” You guys are living in outer space!

[YZF]

Well, it's an intersection of having the right venture, the right person, with the right leverage, at the right time. Elon Musk is perhaps close to unique in that intersection.

Are there other people who could do it but were not in the right place in the right time or didn't have the right leverage (money, connections, etc.)? Lots. If you took away those parameters, if Elon was just an engineer working for Boeing with just enough money to go on vacation every year, then he probably wouldn't have founded Tesla. He'd be some middle manager somewhere like lots of other smart/capable people.

[cultofmetatron]

Working as a software engineer remote is easy mode compared to everyone else. You don't have to spend your time coding in a dingy apartment. There are plenty of people that will pay you a descent wage to work and you can do that from a nice cafe in Thailand. Living costs are low enough that you can pay your bills working part time while spending the rest working on your get rich long term side hustle. I'm writing this as we speak from an airbnb in Turkey with much lower living expenses than when I was in san francisco.

[im3w1l]

> How about merely building a business?

But that's the thing right? You aim to make the next big app, and fail into the comfortable existence of "merely" building a business, or aquihired. Certainly better than aiming for moviestar and ending up a waitress.

[bryanrasmussen]

>Isn't the idea of building the "next big app" itself based on the same kind of get-rich-quick mindset those schemes are exploiting?

Perhaps, depending on the app, a ponzi scheme is based on wanting to get rich by taking advantage of people's gullibility and non-understanding of how ponzi schemes work.

I suppose some apps could have that kind of disregard for how users of the app are harmed, but I think in most cases people building apps also think they are helping their users in some way. Ponzi schemers know they're only helping themselves.

[dvt]

> How about merely building a business? Think small indie developer or Basecamp at best, vs Facebook and Amazon.

I think you're getting hung up on my qualifier of "big" -- really, I'd be very happy to make 250k yearly off of a project (a far cry from Basecamp's $25MM yearly revenue), but even ramen profitability is hard, let alone getting to quarter-of-a-million.

[totemandtoken]

Reminds me a lot of this talk from the Pinboard guy: https://www.youtube.com/watch?v=5Vt8zqhHe_c

Or this talk from the Bandcamp guy about financial sustainability: https://www.youtube.com/watch?v=MaUkS-lr-ZM

[cbozeman]

/r/wallstreetbets exists for a different reason, but it got exacerbated by everything you mentioned above.

WSB members have come to realize that so-called "financial professionals" by and large have no scrying crystal into the market. WSB got there because of the democratization of knowledge that the Internet has caused.

And before you cite some unicorn like Renaissance, that's generating 40% YOY for 20+ years, keep in mind that unicorns, while rare, do exist. Microsoft, Uber, Google, Apple, etc., so forth. How many "investment professionals" would have recommended you dump all your money into these companies when they were but fledging entities? Or even when they went through tough times?

No, I think WSB is doing a service to humanity. They're exposing the smoke and mirrors behind Wall Street.

Good on them.

[bryananderson]

This is based on a common misunderstanding of what “Wall Street” does.

The Hollywood-inspired folk concept of Wall Street is that they trade stocks. That’s what everybody in those big buildings in Manhattan does all day. They yell buy/sell orders into red phones and drink Scotch.

Except they don’t. Wall Street firms like Goldman Sachs make money by providing services such as mergers and acquisitions, IPOs, market making, etc. That is, they make money by selling shovels in a gold rush, not by speculating on where gold will be found. Other firms are in the business of buying and selling illiquid assets such as private companies and commercial real estate (with illiquid assets, there is far lower price efficiency, and thus it is possible to generate excess returns). Still others are in the business of managing people’s money for them—an industry which is mostly about managing volatility, not about generating excess returns (a pension fund usually cannot afford to have its portfolio go down by 50%, even if it’s temporary, so they’re not going to put it all in the S&P 500).

Proprietary trading (where firms use their own money to buy and sell public securities) has been in decline for decades at the big banks, precisely because they don’t have a scrying crystal, and they know it. Public stock trading on Wall Street is mostly the domain of companies in niches like high-frequency trading (such as Jane Street). HFT firms gain an edge through arbitraging different prices faster than anyone else (for example, sell Exxon in New York a few microseconds after oil futures drop in Chicago). In other words, the only people on Wall Street who do what Hollywood-Wall-Street does are the few who do have a scrying crystal.

WSB is not “exposing” anything except the fact that most people (understandably) have no idea what the financial industry does.

[opportune]

There is a cottage industry of financial advisors who do work with people on their personal wealth management. Of course there is a big difference between an investment bank, trading firm, and a person who does wealth management (I'd google it for precise terms, but I'll get hounded by ads for it for weeks). I know because my parents have a "wealth management guy"/broker and some of my friends' parents growing up were also in that business. And there are also of course mutual funds and pensions as you mention.

I am not super plugged into the financial industry so I can't say for certain, but I think while people may not understand the difference between traders shouting on phones, "wall street", and wealth management, people think about wealth management the most in the context of "wall street", because that's what they're personally most familiar with. They think that even though wealth management seems to me to be very decentralized and not really something physically centered around Wall St.

I think wallstreetbets is mostly a pretty unsophisticated subreddit (which somehow declined in quality even more as it grew) but I think the parent was valid in pointing out that they willingly eschew the old-school strategy of diversification + "value investing" done by a third party on your behalf and the new-school (boglehead) strategy of putting literally everything in the S&P 500 or a bond index with the allocation mix dependent on retirement date/age.

There has undoubtedly always been a group of people micromanaging their personal portfolios with less risk-averse strategies like this, and WSB mostly takes things way too far, but at least for me it exposed me to the idea that maybe I could personally do better picking stocks on my own than just blindly throwing everything into VOO (and for people not plugged into the online-personal-finance-geek community, it could be the first time they even realize they don't need to have a third party manage their investments for them).

[vmception]

> /r/wallstreetbets exists for a different reason

If anyone wants to know that other reason, I used to be a mod there (low bar, but keep reading)

WSB existed in a void surrounded by personal finance forums full of the dumbest financially illiterate crowd being spoonfed Robert Kiyosaki and Suzi Orman all obviously sponsored by Vanguard. In fact, it still exists in that void. If you wanted to talk about trading volatility derivatives without being in some 1990s-layout investment banking forum, there was no place to go. WSB was the light, its forum rules specifically saying its the place where trading the VIX is normal.

That is its utility. A place for people with a risk tolerance slightly above an undocumented wage slave. Okay, that was hyperbole, I don't like personal finance forums and Wall Street Bets is the opposite of them. Not everyone is born sucking at basic money topics and not everyone is too risk averse to consider financial products outside of the mold. Actually, let's take it one step further, not everyone was raised around a stigma of money and maybe isn't completely ignorant as a product? Obviously that isn't the prevailing culture, and there aren't many communities that catered to it.

Anyway, outside of WSB the only other communities at the time were in trading guru chatrooms, the ones you subscribe to get into. Now everyone might be joking around but they are worshiping the guru. Its pathetic.

WSB was made for options traders to make jokes and wild trades that had a week to pay off. It then got co-opted by penny stock traders pretending like it was the new Yahoo finance board, and now it got co-opted again by the most denegerate options traders in history and it is marvelous! Its even better than what it originally was and the financial meme niche is new and hysterical.

Hopeless 20 year olds fueling the flame? Sure, that is pretty much what happened. I'm glad they made the venue, it is wildly popular now, and the options market is wildly liquid in ways I could have only dreamed of.

[MacsHeadroom]

Front running is literally scrying and also the reason Robinhood options trading is "free." (Because traders aren't the customer. Front running quant firms are.)

WSB has been duped.

[fractionalhare]

What you're talking about is not frontrunning, it's purchasing order flow for market making. Frontrunning is an illegal activity with a specific definition. Purchasing order flow is not illegal.

While we're at it, quant firms occupy a family of trading strategies which are a superset of HFT; not all quants are market making, trading intraday or pursuing low latency strategies.

With all due respect, please stop perpetuating popular finance misconceptions of the Flash Boys variety. If this is something you'd like to learn more about, I suggest you read the following:

- https://blog.headlandstech.com/2017/08/03/quantitative-tradi...

- Flash Boys: Not So Fast

[jevgeni]

So what if one of those non-market making firms buys order flow?

[fractionalhare]

That's not really a thing, but even if it was, it would still not be frontrunning. Order flow is purchased for the specific purpose of making a market with the wider bid-ask spread acceptable to retail investors. They tend to place market orders and don't particularly care if their trade is off by a cent or two.

You can quibble with the academic arguments on whether or not this facilitates liquidity and price discovery (and therefore helps retail investors). Or you can just place a limit order and move on. Either way, nothing illegal or nefarious is happening. Just because they're purchasing order flow and executing your trade doesn't mean the national best bid and offer (NBBO) is being violated.

[jevgeni]

And capital requirements are done with the specific purpose of maintaining capital strength of banks. Didn’t really stop Lehmann from doing “balance sheet optimization” intra-month.

Just like if market makers say the only thing they do is flow, doesn’t really mean it’s the only thing they do.

[nish1500]

People want to believe in get-rick-quick schemes, and will go by the flimsiest evidence they can find.

I think the trick is to realize those glamorous selfies are mostly a mirage. If you were having the best day of your life on the beach, maybe, just maybe, you wouldn't be on your phone trying to get the perfect selfie.

[dvt]

> I think the trick is to realize those glamorous selfies are mostly a mirage. If you were having the best day of your life on the beach, maybe, just maybe, you wouldn't be on your phone trying to get the perfect selfie.

Well said, but the optics are still there. The selfie is bound to get more hits on social media, more coverage, etc.

[coliveira]

That's why I make a point of not following people who broadcast glamorized versions of their lives.

[an_opabinia]

> For a classic example, just look at /r/wallstreetbets -- young people are frustrated because there's no end to this tunnel

That's a bad example. By many measures retail investors have outperformed institutional investors since March. The simple reason is that options have a built in exit strategy, the thing that's missing when most people lose in scams - including Ponzi schemes!

On the flip side, why then do they outperform? High risk, high reward. Opportunities where you lose your entire principle, like out of the money options, turned out to be wildly underpriced, simply because institutions never buy them.

Anyway, I get it, those people are stupid. But they made money.

[dvt]

> That's a bad example

I don't think it's a bad example, because if you spend some time on that subreddit, you'll quickly realize people are literally gambling with their life savings. In no small part due to disillusionment and cynicism with the current economic realities -- we can no longer work at a stable company, marry a pretty wife, have a couple of kids, retire 40 years later, and live off of a plump 401k.

[throwaway0a5e]

>we can no longer work at a stable company, marry a pretty wife, have a couple of kids, retire 40 years later, and live off of a plump 401k.

This is what nearly everyone in tech who isn't spending their free time shitposting about their side projects and the nuances of programming languages is doing. Sure you can't work your whole career at one company anymore but that's just a reflection of macroeconomic conditions, the stability is still there for the people who's skills are in demand. Pretty much no competent programmer, or electrician for that matter, is unwillingly unemployed for long enough to matter.

[dvt]

> the stability is still there for the people who's skills are in demand

Saying this after 2008 is just empirically false. You do realize that people lost their entire 401(k)s, right? My dad worked at IBM for over a decade and was laid off. More recently, my buddy (late 20s) was laid off by IBM after working there for the past 7 years; I know people in their 40s and 50s (at big companies and startups alike) that were laid off at the drop of a hat once the pandemic hit.

I live in West LA and make a "comfortable" engineer's salary. Guess what, I'll never be able to afford a house here (unless one of my startups takes off or some other equally-unlikely miracle happens). I don't care if you blame this on "macroeconomic conditions," it just happens to be the reality of my generation. To touch on the loneliness/isolation angle, while doing the whole startup thing, particularly in my 20s, I was putting off dating; although I've recently said screw it: even if I die poor†, I'd rather be with someone.

I'm very much a libertarian "pull-yourself-up-by-the-bootstraps" entrepreneur's entrepreneur but let's be real: it's not surprising there's so much cynicism.

† Relatively, of course. I grew up in post-Communist Eastern Europe in actual poverty, so my life is much better than it used to be.

[paul_f]

Unless it was 100% invested in Enron or Lehman Brothers, nobody using a competent financial firm "lost their entire 401K". The markets only took 4 years to completely recover to the 2008 top levels.

[bsanr2]

How do you measure competency? Does not the speed of that recovery, in the face of ongoing and growing pressures on the consumer class that floats the economy-at-large, leave you wary of its fundamental foundation and stability?

[dannyw]

Have you thought about cutting down your expenses, living frugally to build up your investments?

I find it hard to imagine someone making an engineer’s salary can not afford a house, even in LA.

[dvt]

Then you're just woefully disconnected from real estate markets in big cities. The cheapest, crappiest, smallest house in a neighborhood like Santa Monica (which is nice, but not Bel Air or Malibu nice) is $1 million dollars. Maybe I shouldn't complain, because I have friends in San Francisco that have it even worse. The "making six figures and living with 4 roommates" is basically a meme at this point if you live and work in SF.

The solution here is to move to Austin (which a ton of people have been doing recently) or just travel the world because, thankfully, I can do my job remotely (but many people cannot). This was actually my plan, but the pandemic kind of killed that -- maybe next year.

[v64]

> you'll quickly realize people are literally gambling with their life savings

Gambling, yes. But the stock market is not a ponzi scheme.

[ajmadesc]

It kind of is. 1. Debt accumulates 2. Return on investment grows faster than the economy 3. Capital starts to strangle economy through rent causing political tensions. 4. Suffering 5. Economic reset through war, revolution, plague.

[v64]

If you're willing to dilute the meaning of "ponzi scheme" so broadly, then yes, the economy is a ponzi scheme.

[CharlesW]

> But the stock market is not a ponzi scheme.

That depends on who you ask. https://www.hughescapital.com/the-stock-market-is-a-ponzi-sc...

[dmoy]

From that link:

> In 2010, its stock price was $20 and by 2017 had risen to $380 a share, yet Tesla reported a loss of $4.3 billion. How is this possible? The only way to explain this bizarre scenario is to recognize that the market is not efficient

I will pass on buying/reading that book based on this excerpt alone.

I am far away from a tesla fan (I actively encourage my friends/family to not buy teslas, or invest in tesla, etc), but saying "the only way to explain this" is pretty unbelievable.

[ZephyrBlu]

How would you explain it then?

I don't believe Tesla would be valued so highly or fluctuate so violently if the market was actually efficient.

[numpad0]

> can no longer work at a stable company

Been wondering lately, why is a position in a stable company also generally considered stable?

I mean, it’s a scalable system designed to survive, running on cash flow. Say load reduces, or flow reduces, wouldn’t it be only sane to immediately cut down on worker nodes? Why keep, except as strategic reserves?

I suppose because strategic planning up top used to be harder in the past so reserves tended to be large?

[alisonkisk]

Come on. WSB is people goofing with real or fake money for fun and lulz. It's not for desperate people trying to survive.

[dvt]

I think that's debatable, but it's most definitely people being cynical about the current state of the economic realities we face. It's all fun and games, until someone commits suicide[1]

[1] https://www.cnbc.com/2020/06/18/young-trader-dies-by-suicide...

[bsanr2]

I dropped ~$1000 of my last savings into options earlier this year because "DIS is going to print." Actually, it's because I was unemployed and staring down the barrel of a rent payment that that money would not be able to cover. I figure I lose the money and not make rent, just as if I'd done nothing, or it makes the money back and then some, and I'm able to cover another month. If I'd sold about a week into holding, I'd have made ~50%. Then our Fed Chairman made the totally sane and not completely unprecedented decision to pump $2 trillion dollars into the economy. The underlying stock shot up and my options values evaporated overnight, amidst the issuing corporation announcing that all of its revenue streams would be effectively dead for the foreseeable future.

Just sensible market behavior.

[tasuki]

I think the second half of your comment is sarcastic but also... entirely correct?

[bsanr2]

Well, no. The bailout was unprecedented in size, it was completely insane (in that it clinches the imminent and extremely messy doom of either the American middle or investor class, depending on whether populist fear or populist rage prevails), and there is zero percent chance that the coming maelstrom is "priced in."

Most Americans have been so fully shut out of capital that they're practically begging for asset values to get rocked. They'll encourage it, even. (What do you think this lockdown backlash is, unconsciously?)

All of Disney's revenue streams shut down for 3 months and its stock went up. The market needs to be reflective of conditions and not simply the desperation to never see a bubble corrected, or people are going to start calling the bluff.

[giantg2]

For most on there it is with a small amount of disposable income or house money. But there are some doing it with the money they need to survive or retire. Or just don't understand the naked position they just screwed themselves with.

[nish1500]

Trading on the stock market (by and large) doesn't create value. If someone makes a killing, it's because someone lost it. You hear about those who make money - because it's the story you 'want' to hear.

People don't understand how money comes from value created, in the long run. People think they can game the system. Everyone feels they are not a part of the average.

[friedman23]

>If someone makes a killing, it's because someone lost it

Not true, companies can create value, that value is reflected in the stock price. The economy is not zero sum. Did all the people that got rich off of apple, google, microsoft, nvidia, etc get rich because someone else lost money?

[nish1500]

Exactly! Which is why my comment talks about 'Trading' not 'Investing'.

https://www.investopedia.com/ask/answers/12/difference-inves...

[rootshelled]

Those companies got value via selling products with a margin to their customers. So, technically their customers lost money for those companies to gain money.

Not that there is anything wrong with that. Just pointing out how I think your logic is flawed.

[anonymouse008]

Eh, depends on how you defined ‘lost’ a lot of money —

Many of the calls that have hit recently only capped out people’s gains - so yes there was an opportunity cost to that lost, but people didn’t literally lose invested capital. Not as much money as you think has gone into the red this year - even on the way down.

[refurb]

Trading creates liquidity, which supports a healthy capital market which companies can access for capital.

[bsanr2]

(I mean so does heavy taxation of capital ~hoarders~ holders, to be redistributed among the country's labor base, who will then tend to spend it immediately on goods or personal investment, but we don't talk about that.

OR

The point of liquidity is to get people doing things, but the status quo today seems more like giant firms trading above our heads to manage the risk of rent-seeking on an increasingly precariously-positioned consumer class.)

[refurb]

Neither of your points seem based on an accurate understanding of the financial markets.

[bsanr2]

I don't know why another user's comment,

Neither of his points seem based on Economic dogma shoved down your throat during undergrad.

was flagged, as it was neither inflammatory nor uncouth, but I agree with it. You seem to have an entirely elementary conception of the market and an inability to understand the ways those assumptions have fallen apart in the face of market and regulatory conditions.

[LatteLazy]

Not trying to sound aggy but... Do you have a source for retail investors out performing institutions since march? I'd like to know more about this and I haven't heard anything but I've been pretty disconnected from news so excuse my ignorance please!

[dannyw]

There’s no credible way to precisely define this, especially because success of investing is not purely based on returns of a half year horizon or so.

[cbozeman]

> Anyway, I get it, those people are stupid. But they made money.

They are absolutely not stupid. Everything they're doing is entirely rational. It doesn't seem that way, because clearly you're not in the same circumstances as they are. Neither am I.

However, I completely understand it. If you're 22-25, not married, and have far more liabilities than asset, you have no reason not to trade on high margin with an options play and try to turn $50,000 into $2 million or more.

If you lose the $50,000, you can recover. If you end up horribly in debt, you file for bankruptcy and move on.

Given the current state of affairs, its completely understandable.

[nradov]

It's hard to believe that OTM options are wildly underpriced. Institutional investors might be unable to trade them but there are plenty of hedge funds with no such restrictions. 0

[gruez]

>That's a bad example. By many measures retail investors have outperformed institutional investors since March.

The average retail investor might have outperformed institutional investors, but it's a leap to suggest that wsb outperformed institutional investors. Foe one, the average retail investor isn't buying otm options like wsb users are.

> The simple reason is that options have a built in exit strategy, the thing that's missing when most people lose in scams - including Ponzi schemes!

Not really? Options can have their value go to zero if they remain unexercised, just like if a ponzi scheme goes bust.

[ek750]

>Not really? Options can have their value go to zero if they remain unexercised

true. but as a person who plays with options, I should point out that when you buy an option contract, you don't want it to expire worthless.

However if you are an options seller, that is the best possible outcome.

[ll931110]

You can win in a single year or two. But winning year over year for 10 years? That's not possible, unless you are .. wait for it .. being part of them?

[coliveira]

If you think OTM options are underpriced you're in for a rude awakening. Sure, you can make lots of money with OTMOs, but don't expect to do this regularly.

[micael_dias]

To be fair he didn't they are. He said they were, which might have been the case in March after the corona crash.

[ra7]

After the March crash, volatility was really high. So I doubt even far OTM options were that cheaper back then.

[sooheon]

> By many measures retail investors have outperformed institutional investors since March

Source please?

[rorykoehler]

Don't try build the next big app? If you're frustrated by the status quo, reject it and live life by your own values. Also nothing (bar the pandemic) is stopping you going to Thailand or another cheap location and building your app from there. The flight tickets will pay themselves off in cost of living savings pretty quickly.

[unishark]

I thought the point of those nomadic lifestyles is to earn the same trifling money anyone can earn over the internet with a little effort, but live where the money goes farther.

[the_gipsy]

Life is a pyramid scheme.