Comment by neonstatic | Hacker News Reader

Comment by neonstatic | Hacker News Reader

Parent Full thread

> Not financial advice, but: Honestly it’s pretty hard and I wouldn’t recommend it. Shorting stocks and getting into bonds / default swaps but the system is broadly rigged against small players doing well here. Ie in the Big Short see everything that was needed for two guys to bet with their own money.

Do you base your knowledge on anything other than a very mediocre movie?

If an "investor" believes the market will sell off drastically, there are many, many ways they can express that bet in the open market. They can short index futures, buy put options, long volatility... so many options that depend only on the thesis being right. It does not sound as sexy as "look kid, the billionaires rigged the system!", but it's true.

The problem is the old saw about the market staying irrational.

You can't time the market reliably. Ultimately the base advice remains sound even if it's couched in a bit of conspiracy: diversify and allocate your assets based on your risk profile, as informed by your retirement timeline.

> You can't time the market reliably.

There's an entire profession doing that: traders. But for most people, yes, it is not worth it. No argument there. I just don't like conspiracy theories and that line of thought, it's cheap and stupid.

> There's an entire profession doing that: traders.

Well no, there's an entire profession trying to time the market. The data is not favourable as to their ability to actually do it at a rate greater than random chance.

But.

I also don't think it's reasonable to label as a conspiracy a claim that markets are rife with cheating, insider trading, etc. Just look at the current US Presidents profit margins.

Is that systematic, organized, conspiratorial, rich v poor market rigging? No. But it would be naive, I think, to believe that the rich aren't significantly advantaged in the market in ways that the average person isn't. There is, after all, a reason payment for order flow exists as a valuable thing.

Reply on news.ycombinator.com