[evergrande]

"We're just protecting you" is a transparent excuse to rig the game. It's pulling up the ladder. If it was actually in the best interests of the people, you educate and give them tools. You don't lock them out. And you focus on preventing and going after the bad actors, the scammers.

[bluecalm]

It's not in the your best interest to have access to more profitable but more risky investments until you have a lot of money available. If it isn't obvious to you just think of the shape of utility of money curve.

More profitable but more risky is the most you can hope for. There is competition in private equity market so it's not like it's profitable unicorns for everyone who has access to those opportunities. If anything you should be able to invest in a private equity firm to begin with so they can balance the risk for you by investing in portfolio of assets and guess what - you can do just that as some are publicly traded!

It's really not an evil plan. The regulation is just common sense to protect you from big risk of going bankrupt.

There is plenty of opportunity in public market btw. Some examples of x20s from recent years: SHOP, AMD, TESLA. Some examples of very recent although smaller multipliers: NET (really, if you just read HN once a week you know they are awesome), Unity. I mean if you are so confident about picking Uber it shouldn't be rocket science to pick one of the above either.

[barnabee]

Sounds like nonsense not common sense. It's not in my best interest for anyone but me to decide what's in my best interest. Not everyone measures their life by the same metrics.

The risk of going bankrupt is part and parcel of trying to suceed and live the life you want, whether in business, investing, day trading, or even just getting a university education in some places…

[vorpalhex]

> The risk of going bankrupt is part and parcel of trying to suceed

You probably don't have a sustainable investment strategy if bankruptcy is a likely outcome. You may have a gambling problem that involves securities, but that would not be "investment".

[errantmind]

That isn't for you to decide for someone else.

[bluecalm]

Every culture has some level of commonly accepted paternalistic policies. Forcing people to wear seatbelts, banning certain drugs etc.

Not allowing small investors to buy shares in non-public (and therefore not needing to disclose much information) companies doesn't sound like an especially radical idea. You just need resources to do due diligence to invest in such companies and as a small investor you don't. There is a common interests in preventing people from being idiots in the investment world.

[errantmind]

I disagree with each of your examples.

First, just because people do it doesn't mean it 'should' be done. See the naturalistic fallacy.

Second, just because smaller investors lack resources, doesn't imply they should be prevented from acting with less information. This doesn't follow from your final claim that there is a common interest in preventing them from participating and this is unsubstantiated.

Let people make their own mistakes, you don't get to decide for them.

[jimkleiber]

Maybe the stronger argument is that it's not in the best interest of the community for a member to go bankrupt, even if it's what that one member believes is in their own best interest. Maybe bankrupt is not the best example, because bankruptcy law actually is a social safety net to help people not get indebted for life, or even pass on all that debt to future generations.

That being said, I think the individual vs communal risk decision and regulation is complex and really depends on the situation.

[notahacker]

Nonsense. Venture capital, as an asset class, performs far worse than regular stock indices anybody can buy with a smartphone (Some funds do very well indeed, but others actually lose their LPs money). That's venture capital as practised by professionals that get warm introductions to the highest performing startups, have teams of people to do due diligence for them, involve themselves in hiring and firing the C-suite, can award themselves ridiculously favourable terms like liquidation preferences if the company's struggling and have connections at Valley companies awash with cash when they need to get a startup that'll never be profitable an exit.

Joe Public needs to do better than the people who already have more education and tools and influence than the average person can ever expect, just to break even on their startup portfolio. And let's face it, Joe Public wants to "invest" whilst being so wilfully ignorant of basics like liquidity and adverse selection they think there's nothing to actually be protected from...

[errantmind]

People often learn one mistake at a time. Let them. If they go bankrupt, so be it.

Not everyone wants a nanny state to dictate their activities.

[jimkleiber]

As waprin mentioned above and I expanded on, I think yes, to enable people to take more risk, we provide stronger safety nets for them, which includes educating people and giving them tools. The challenge I see is that the ones who become rich mostly off the risks they take don't seem to want to invest in building those strong safety nets for people, to enable others to take risks that wouldn't be life or death, rich or homeless risks.

In the absence of resources and desire to provide strong safety nets, such as the education and tools you describe above, one way is to just prevent people from doing it.

I agree with you, I'd rather have more freedom to experiment and take risks. I also don't want people to fall to their physical or financial death.

Actually, there's a book that kinda talks about this idea called Care to Dare by a former hostage negotiator named George Kohlrieser. I took his leadership training seminar and he strongly suggested that to encourage people to take risks, we must first build secure bases for them so they feel safe enough to go off and explore knowing they can come back home.

https://www.amazon.com/Care-Dare-Unleashing-Astonishing-Lead...

[Daishiman]

> "We're just protecting you" is a transparent excuse to rig the game. It's pulling up the ladder.

This is a truism that's not based on reality. You can question whether the protection is actually useful for the case, but there's a reason a bunch of professional licenses exist, and they do protect people. I don't want to "educate myself" to see if my doctor is competent to practice.