Some of them do beat the market. They are also producing returns that are more robust to a downturn. So even if they dont match the S&P performance, in a downturn they dont lose as much as the S&P does. It's difficult to compare index funds to hedge funds, they have different purposes. When the market is always going up, it looks like a scam.
Hedge funds are also statistically unlikely to beat the market and finding one that does requires a huge capital buy in that few workers can make. You're talking 250-500k minimum buy in. Hedge funds have chronically underperformed for the last 10-15 years. Now that so much information is available, much of the market performance is priced in now.
Once again, the best bet for the average person is an index fund. On a 30 year timeline all of these blips are smoothed out. If you can afford top level financial firms you're probably way wealthier than the average person.
Did they beat the market because they are actually better investors, or did they just get lucky? There are so many hedge funds now that statistically a few of them are guaranteed to have long lucky streaks.
This kind of thing sounds great, any suggestions for area of businesses that you would look at starting? Part of the challenge is that the range of things that you could do is massive.
That's it, once you stop thinking about the typical tech ideas as your central focus and start thinking about things you can do quickly and make money at the world has millions of waiting clients and ideas.
I have brought this up before on HN, if you look around in any town you will find plumbers, electricians and other "trades" people (or mom & pop shops) who started their business and have some basic business sense. Many are sitting on businesses that have high margins and can easily become multi-million dollar businesses (or already are) and make their founders quite wealthy. A lot of time people get so focused in their narrow area they forget to look outside of the industry or type of work they do. I am not suggesting you become a plumber, just that if you look at those businesses there are always needs to fulfill for people. And technology as a whole seriously ignores traditional businesses like these, a mistake I do not make.
To find these ideas, talk to everyone. I even found clients from talking to fellow parents at my kids sporting events. We'd talk about work they'd open up where they worked and I'd chat them up about what the opportunities and issues were. 90% of communication is listening and asking calculated (not in the evil sense) questions.
I always follow the rule that every issue, complaint or failure is an opportunity to provide value, even if it was my own.
Selection bias, if you're starting a company at age 43, you are risking your career and monetary stability. The type of person who can afford this is probably already part of an elite financially secure class. How misleading is this article? They are comparing apples to oranges, people starting companies in their 20s are not the same as people starting companies in their 40s. Take the set of people in their 20s who would be capable of starting a company in their 40s (meaning they have career success, a cushion of money, etc) and compare them to the entrepreneurs in their 40s, then you have a statistic. This is false otherwise.
I'd actually argue the opposite. If you sacrifice retirement savings in your 20s, it's going to hurt a lot more than sacrificing some contributions in your 40s.
you are risking your career and monetary stability, at your 20s too, if you start a company and fail, you risk going homeless and having a huge gap on your cv.
I would like to see a citation for this assertion that, if your company fails, you are at high risk (or higher than normal risk) of homelessness. This doesn't fit with what I know for what puts a person at risk of homelessness.
And there's no gap on your CV. You put down "Worked on launching x startup from X date to Y date. It sold, folded, whatever and I'm looking for a job now."
Thank you in advance if you can come up with a cite.
My understanding is that failing is more of an issue outside the US. In the US, which is where the data is from, I tend to agree with DoreenMichele: Startup failure is fairly easy to recover from. You mostly risk opportunity cost (lost wages, lost promotion periods).
What is career stability now days anyways? Guys working at amazon right now are scared to death everyday they will get fired. I know people who lost jobs at almost every FANG company due to politics.
Not sure the difference anymore of working for the man and losing your job or doing a startup and failing.
Quick question, do you do much machine learning in your current job on complex and large datasets? I find that the people who claim that machine learning is not math heavy are not solving the actual hard ML problems. Ofcourse it will be easy if your problem maps well to some framework, where jamming your data into a model produces useful outputs, but theres plenty of problems where you cant do that, and the second that happens, you need to understand the algorithms. Its similar to using some javascript framework, where you can plug in solutions great, until you need to do something outside the framework.
thats not the point, the point is that you cant assume that you really know what the function is doing, too often its doing something else thats really hard to figure out without looking closely. Good code will make it so that you dont have to look closely, you can read the variable and method names.
You seem very sure of yourself in this. Perhaps read up on the topic more than you already have. Read Nudge and other such books by behavioral economists. There are experts in neuroscience who disagree with your view. It’s worth considering how this is possible.
The problem with neuroscience is that they know nothing. For instance, it was considered true that neurons in the brain dont change and adapt, and then the concept of nueroplasticity came along, it was revolutionary. Twenty years later, a new study comes along and says that our brains are not as dynamic as we thought afterall. Human history is ripe with "experts" who were wrong, sometimes for centuries.
There are instances of where experts got it wrong. But to claim that neuroscientists know nothing is a bit arrogant. They certainly know more about the brain than you do (unless you too are a neuroscientist). I'm guessing you are not a neuroscientist. You hold a belief about decision making that is at odds with some experts and you have no expertise in the subject. A reasonable person would, at the very minimum, conclude that there is the possibility that their conclusion is wrong.
We can point to instances where experts got it wrong. We also can point to instances where they got it right. The people who study intensely an area are more likely to be right about that area than a non-expert. Physicians sometimes get diagnoses wrong. Yet a reasonable person pays attention to what they say.
I would consider myself an amateur neuroscientist, in the sense that I frequently read blogs on the newest publications and findings, have a decent background in pharmacology literature.
Aside from FMRI scans, which give us a very broad picture of the brain, there is no way to really tell "whats going on". We have not developed that yet.
What neuroscientists currently know, aside from FMRI scans, is that certain behaviors are associated with certain genes. They can say, people who had gene X and went through life situation Y, were Z percent more likely to have a bad outcome. This is where the human behavior is deterministic idea (and "evidence") comes from. One specific expert on human behavior is Robert Sapolsky from stanford, who no doubt understands human behavior deeply. Almost all of his conclusions are driven from the method I exclaimed above. Everything is a statistical conclusion on how the average person behaves, which is a huge error in modern science
Yeah you really cannot find any good information about it without spending hours, google just surfaces terrible generic articles on equity. Real information is surprisingly hard to come by, some kind of SEO has pushed it elsewhere.
Respectfully disagree.
'normally distributed and biologically driven' is a distinct and non-shallow point of view, as far as I can see not really put forward in any other comment.
