Hacker News Reader

"EDIT: I cannot stop thinking about how ubiquitous YOLO as a philosophy has become in the last decade. Everything about life has become a binary of win or lose. Your stock market plays "won" if you are in the green, your tweet "lost" if you did not get effective engagement, your latest commit "won" if the established metrics succeeded after deployment. And then there are the implications in machine learning, where everything becomes a binary "correct or incorrect" assessment..."

Much of this is reinforced through perceived and real rampant income inequality. If people think they can't advance without taking disproportionate risks - and they're mostly correct here - you'll start to see that action, and then it gets amplified in the social media atmosphere that we live in today.

I think it is a great idea, but if you want to reward a more sane investing strategy (ie low-cost broad index funds) you could maybe accelerate historical or simulated data and anonymize the ticker IDs?

Obviously there will probably be one lucky YOLO player but you could rank everyone and also factor in risk-adjusted returns.

If you want to end up with the normal retirement strategy you probably want to simulate regular contributions and occasional emergency withdrawals.

If you just have a simulated pile of money and want it to go up, but don't actually need it in the meantime, then the risk isn't important and diversifying too much will just guarantee you lose. The usual math in MPT makes strange assumptions like a normal distribution anyway, so it thinks an asset is bad if it has too much upside risk.

My class did almost this exact exercise in junior high back in the early 90's. Teacher gave us a menu of stock tickers of companies that have been around since 1960, complete with some rudimentary financial info as of 1960. Told us to research the companies and come up with a list of stocks to pretend we bought and held for 30 years. This was before the Internet so we couldn't just sneak a peek at the current prices. The goal of the exercise was to learn about research and ultimately diversification, but our team "won" by simply guessing the stock that was most well-known today, and YOLOing the entire fake money investment into it. Taught entirely the wrong lesson.

It would've been so easy to avoid this, even in the internet age, by just replacing the actual tickers with made up names...

I understand at Bloomberg they’ll do an internal “fantasy financial league”, but they rank by sharpe ratio, which adjusts based on the volatility/risk (something like that).

But that’s such a good point about stock competitions generally showing kids that the reckless gambler wins the most - never thought about that.