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Comment by ucaetano | Hacker News Reader

The problem is that it isn't "amount you can afford to lose": you'll lose.

It is a guaranteed way to lose money on average. It is just like gambling: if you want to do it for fun, and count the loss on your budget, fine. But don't fool yourself into thinking that it is a sensible investment or that you're doing it because "you know finance".

Just don't. It is a bad idea and particularly a symptom of overconfident people who think that "they are smart and can read trends and predict the market". Nope.

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You're interpreting what I'm saying (and what I believe the author is saying) as "amount you won't mind losing, so just go for it bro, you might hit it big!"

Maybe I'm reading too much into the original text, but when I said, "amount you can afford to lose," I intended an implicit "because you will lose it and then you will learn" that I think the author is also implying.

If you do a 9 week fake money stock pick'em exercise (say in a FINA class), people will follow it for exactly 9 weeks, some will lose, some will win, and everybody who doesn't win will take away "gee I should have picked better, that was obvious in retrospect" which obviously isn't the point.

With real money, I feel like you're more likely to learn the intended lesson. If it works out for nine weeks, you'll keep at it because it's actual money. You'll learn eventually.

> I intended an implicit "because you will lose it and then you will learn" that I think the author is also implying.

But you won't learn, because there is nothing to learn, just as there isn't anything to learn from betting on the lottery or in a casino.

Well, there is one thing to learn: you should not do it!

> If you do a 9 week fake money stock pick'em exercise (say in a FINA class), people will follow it for exactly 9 weeks, some will lose, some will win, and everybody who doesn't win will take away "gee I should have picked better, that was obvious in retrospect" which obviously isn't the point.

On average, people will lose.

Seriously, people won Nobel prizes proving this. Do you think that they were wrong?

> With real money, I feel like you're more likely to learn the intended lesson.

Which is: you should not be doing it in the first place!

This is like spending $10,000 in a casino to learn that you should not be putting your investments in a casino.

Here, I'll save you some money: I'll charge you just $500 to tell you that you should not be actively trading and picking assets.

You're welcome, please give me your CC info so I can charge you.

Heh. Reminds me of a friend who keeps "investing" which is handpicking stocks and hoping that they succeed. Now he has a group of friends and they spend most of their time playing this stupid game of trying to pick a winner. Which sounds like a waste of both money and time.

This advice is how you end up like my friend: he's got thousands of dollars in high interest credit card debt and a porfolio full of stocks. Like, dude, you're paying 30% interest to gamble on stocks and he thinks he's being prudent because "investing."

When people say "save" or "invest" without context, people end up borrowing at high interest in order to do so. I saw a guy on Reddit with like $30,000 in credit card debt and $20,000 in a savings account.

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