Hacker News Reader

Comment by paimapi | Hacker News Reader

are you too young to have lived through the multiple recessions that have happened in the past few decades or Bernie Madoff or Enron? Or Theranos and FTX? and that's just off the top, give me ten minutes to dig in and I'll get you at least twenty more

View on HN

None of those were the result of mergers.

Pedantic. The point was "aren't investors rational" and they clearly hop on short term fads to their and our detriment. Plus saying Enron wasn't a product of a merger is very funny

Passive investors earned 10% per year for the last 30 years doing no work and taking on no risk.

Seems very rational to me.

I'm sure passive investors loved the dotcom bubble and the housing market crash

I'm sure they'll love it when this AI bubble pops too

If they were passive, they wouldn’t care, because they should not have a reason to liquidate all equities during the few down years.

It really depends on luck, timing and inflation.

For example if you bought S&P 500 in Jul 1929, you got your investment back in 1955 (inflation adjusted). If you bought S&P 500 in Apr 2000, you got your investment back in 2014 (inflation adjusted).

https://www.multpl.com/inflation-adjusted-s-p-500

99.99% of people are not investing a lump sum on one date and liquidating it all on another date. Extend this graph to today, and it will be much greener.

https://archive.nytimes.com/www.nytimes.com/interactive/2011...

https://www.reddit.com/r/dataisbeautiful/s/oLP2K6gdbC

Plus it’s political suicide to let SP500 stagnate or drop.

your own NYT link shows the vast majority of withdrawal dates to have a median of 4.1% followed by the 'slightly above inflation' group then the 'did not keep up with inflation' group with the green returns being the smallest likelihood. there's even this literal quote in the article:

"Market returns are more volatile than most people realize,” Mr. Easterling said, “even over periods as long as 20 years.”

in your second link, a commenter rightfully calls out that the log scale makes the data reductive

I think whatever it is that you need to fall asleep at night is your own habit - it doesn't need to be the rest of ours

People don’t randomly sell, so treating all dates as a uniform random variable makes no sense to complain about.

Not understanding how investing works doesn’t make everyone else behave under your misunderstandings.

Why would you use inflation adjusted numbers? It seems like the proper comparison would be t-bills or cds.

They invest because they’re smarter than cherry picking outliers to base behavior on, like you are. They have empirically done well as a group over standard timeframes.

Passive investors were still taking on risk

If you’re claiming the merger that created Enron is the sole or majority of its fraud 16 years later, then explain the vast majority of other mergers that weren’t fraud.

Or are you claiming anything that was a merger ends like Enron?

Reply on news.ycombinator.com