[dandelany]

Meanwhile in the Theranos thread next door… “What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.” Financial professionals do dumb things, sometimes en masse, and I think there are still some opportunities to make money if you have a good nose for BS/mass delusions.

However, the problem with this strategy is, as Keynes put it: “The market can stay irrational longer than you can stay solvent.”

[stouset]

It's also very easy to convince yourself that you have particular insight that those other people lack. You might even occasionally be right. But generally speaking the odds are that they understand something you don't, not the other way around.

Specifically to your Theranos point, Theranos was never public. Conning individual investors out of private investment money is somewhat different since the people who saw through the bullshit don't have an easy way of profiting off of that sense. The options were to buy in or opt out, and plenty of investors wisely decided to opt out but there was no play for them to profit off of the collapse.