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Dr. Eric V. Larsson's avatar

“Easy money-making opportunities are almost never real; professional mercenaries would have found and exploited them first.”

At best, the rest of us are the sheep who get the back-to-earth returns, or at worst, are the ponzi victims.

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Tdubs's avatar

The amazing thing about that bonkers Cathie Wood growth prediction is that some singularity enthusiasts are so far out there with their predictions (like global GDP will start doubling every week in the 2040s) that she probably seems restrained and conservative to them.

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Edward Scizorhands's avatar

And imagine we really do get 50% annual GDP gains. Somehow. In that scenario I sure as hell am not going to worry about underperforming the market.

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Doug S.'s avatar

Imagine a machine that instantly turns infants into college educated adult workers. What would that do to the economy's growth rate? Something like that will happen with artificial intelligence someday; we just don't know if it will be within our lifetime or not.

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slwstr's avatar

It’s as probable as another coming of Christ. Curious what that would do to GDP growth.

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Howard Ahmanson's avatar

The coming of Christ will happen, before the other foes.

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Mark Dijkstra's avatar

Another banger of a column! Great stuff, Benn and Noah!

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Vegan Commie Atheist's avatar

"Money for nothing and chicks for free" is the animating fantasy of nearly every investor, and every "financial services professional" trying to permanently separate "investors" from their money. If this only involved rich people scamming and stealing from each other, I really wouldn't care. But given the frequency with which the scamming and stealing have knock-on effects that make life pretty unpleasant for the rest of us, I feel obliged to squander at least a few minutes of every day keeping an eye on these feral sociopaths. Not that there's really anything I can do about them. I just hate surprises.

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Alan Goldhammer's avatar

Excellent post. It's always useful to re-read Charles Mackay's 1840 work, 'Extraordinary Popular Delusions and the Madness of Crowds.' Tulipmania reappears every couple of decades dressed up in different clothes. Fleecing the gullible is something all investors need to be alert to.

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Jestyn thirkell-white's avatar

Although he apparently lost a bunch of money in the railway stocks bubble, shortly after he'd published the book...

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John Harmon's avatar

Re fn 6, Andreesen Horowitz did not invest in Terra, it invested in Dfinity. From linked article: "Dfinity and Terra, have now secured funding from big names such as Andreessen Horowitz and Binance respectively"

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Noah Smith's avatar

Thanks! Correction issued.

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Igor Ranc's avatar

Thanks! Here is a perspective of a small fish retail investor as a side :)

https://eightyfour.substack.com/p/want-to-invest-in-stocks

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Skip_K's avatar

Excellent Igor.

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Igor Ranc's avatar

Thanks Skip! :)

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Bryan's avatar

Good stuff, as usual! One minor disagreement: People tend to conflate “crypto” and Bitcoin.

Let the record show that people holding their own Bitcoin in self-custody have dodged this bullshit. I personally also remain up over 400% on Bitcoin because of my long term outlook, and I continue to buy at newly low prices.

We can call this a minority report, but I think the people weathering this market the best match my profile.

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thisgoesnowhere's avatar

This is true of any cryptocurrency bought at 1/4 of todays price and kept in self custody. Bitcoin is not special for this reason.

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Bryan's avatar

True. Bitcoin is special because of a host of other properties that make it alluring at any price.

Here’s a five minute explanation that I agree with:

https://youtu.be/0a5Jt8fxB0o

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Edward Scizorhands's avatar

> people holding their own Bitcoin in self-custody have dodged this bullshit

People who bought any time in the past year have lost money.

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Bryan's avatar

Very astute.

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Crush Sanchez's avatar

As a fairly cautious investor, I stick to products or services since it’s what I know best. Learning more about these bs investments confirms that I’m safe for the most part. Thanks for writing this!

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David Carr's avatar

Great article.

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Vernell Chapman's avatar

I really enjoyed this. Thank you.

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Tracie Barnes's avatar

1. Jack Bogle - low-cost index funds

2. Taylor Larimore - 3-fund portfolio

3. Michael Kitches and Wade Pfau - rising equity glidepath

4. Douglas Adams - "Don't Panic"

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Sandy Ericson's avatar

One more reason why all schools and colleges need to have Consumer Science programs -- Guess what? They are not just for women! It's all about what to do with your money, how to spend, keep it, and use it to structure your best life.

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Margaret Stumpp's avatar

This is a good piece. I might add that investors should also be aware of managers who believe their own marketing pitches a bit too much. Many, albeit legitimate, strategies rest on shaky empirical foundations, biased backtests, and unrecognized factor exposures. Despite good intentions, shoddy research eventually leads to lackluster performance.

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George Aliferis, CAIA's avatar

This might be one of the most important articles written about investing

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