Managing money for rich families AMA

[DarkRange55]

I guess misspoke about what my cousin studies in economics at Harvard as a researcher and professor. It is not real estate, so I apologize to that one user for that. But he actually specializes and teaches a course in energy markets. So if you'd like, I can attach a bunch of slides and information on that. But it will have to be a little bit later today since I am currently busy at the moment, and I have to go through all of my emails from him to find it.

Secondly, is your questions about inflation and deflation separate from gas prices?
You also have things like stagflation and greedflation and shrinkflation and reflation and price gouging and Excuseflation and skimpflation and wageflation and others…

My friend's dad used to be CFO of Shell and my other friend sold his oil company. I can try to get some more info but

.

I'll respond to this tonight…

 

[sserafim]

*teaches a course on energy and oil markets. Simply put it is complicated. Yes very much supply stuff / storage snd individual markets/infrastructure ( pipelines and tankers)... will post some presentations for you

gold / currency was a fixed back (and price) exchange rate before currency / floating dollars. So a central bank control mechanism. back when more controls. part of response to bank runs -- before Fed in 1913 and floating rtes in 1971






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IWhat exactly happens during inflation and deflation though? You mentioned oil prices so that got me thinking: why are gas prices always changing? Supply and demand? I don't understand how the price of something can change so much…

I have a cousin who is currently a managing Director at one of the largest family offices, basically an investment company for super rich people so she manages Mark Zuckerberg's money among a bunch of other people and before that when she was getting her MBA at Wharton (Ivy League) she worked at Chevron in the gas, exploration, division, something like a corporate something rather I forgot her exact title before that she was a vice president at Morgan Stanley, and before that she was an analyst of the hedge fund. So she would probably be a much better person to ask lol

Sorry, speak to text. Kind of sucks sometimes.

Oh okay. Honestly I didn't understand any of that but thanks for the effort I guess

 

[DarkRange55]

Oh okay. Honestly I didn't understand any of that but thanks for the effort I guess

Funny that milk can cost more than gas sometimes. Gas has increased since the 1950's but it hasn't seemed to increase at the same rate of inflation as other items in the basket of CPI.

hydraulic fracking in the US helped turn the US into a giant oil exporter.

 

[DarkRange55]

Yeah I'd be interested I gotta say as a trader myself im impressed with your knowledge base.

So if algos control everything and your edge is dead how do you make money now?

Also why do u wanna ctb sounds like your apart of the 1%

Hedge fund question, I would also add:
Do you wonder why hedge fund managers are wealthy...They make money no matter how bad they perform.
It's kind of like the ones that do well have inside knowledge that the public is not able to get ahold of...legally.

As for PE/VC - it the diversification benefit for institutional or endowment that type investors which is appealing is the primary reason they exist.

1. Access to unique opportunities not available in public markets like startups, emerging companies, or private businesses.

2. Active Involvement and influence.

3. Tax Advantages like tax credits, deductions, or exemptions. These tax advantages can help reduce the overall tax liability for investors

I know VERY successful VC's. But most of the funds don't return well.

There's a good video on PE if you're interested.

If you're looking for a banger (as a value investor and not a trader), I would do what Peter Lynch suggested, and look in the small to mid caps.

Lmao. Wait btw, what's the difference between a mutual and index fund? I have a Roth IRA and deposited $6000 into it. I didn't use all of it to buy the shares of the fund though (I forgot if it was index or mutual, I'll have to check). I still have like $3000 in the account which I didn't invest. Should I invest the remaining money?

I love ETF's, I love mutual funds as long as they're indexed. An ETF can be actively managed (like ARK), an ETF can be passively managed. A mutual fund can be actively managed, a mutual fund can be passively managed.

An ETF is an exchange traded fund is a collection of stocks that allows you follow an index like the S&P500, a company size or a particular sector or industry.

All a mutual fund is, is a bunch of people pool their money together, hand it over to a manger, who can be a manager of a passive fund, you still need a somebody watching your passive fund. And that manager, manages the funds according to the fund's investment objectives. VT is an ETF and it trades throughout the day. VTWAX is the VT equivalent mutual fund. It tracks the total market, it's an index mutual fund. I think for somebody that is tempted to trade, you may not even want to buy ETF's and just buy mutual funds. The reason I've liked mutual funds until recently is that they allow you to automatically reinvest. I can setup an automatic contribution to my mutual fund because it goes in there and it settles at the end of the day. Until very recently it was very hard to automatically invest in ETF's because you have to put money in your brokerage and then during at least set an order then buy it during the trading day which is a pain in the neck. With a mutual fund, it's convenient, it just goes in so you don't have to think about it. Apparently with Fidelity now you can do auto investing with ETF's. I haven't even looked into that which is something I will consider. So for most people it might be good to avoid ETF's all together. Jack Bogle was against ETF's and I actually with him to an extent. If you look at the data behind ETF's, people trade them, they don't hold them long-run. Even like S&P500. There's a lot less trading with mutual funds because they don't change value during the day. That helps a lot of people hold onto their investments over the long-run which is a very important behavior.

VTWAX has a .1% expense ratio. VTSAX which is Vanguard's total market index has a .40% expense ratio. So it's .01% more expensive than the ETF equivalent and you can automatically invest in it and you're less tempted to trade it. Index mutual funds don't have insane fees. In my mind the big ones out there are VOO, VTI and VT.

Hedge fund question, I would also add:
Do you wonder why hedge fund managers are wealthy...They make money no matter how bad they perform.
It's kind of like the ones that do well have inside knowledge that the public is not able to get ahold of...legally.

As for PE/VC - it the diversification benefit for institutional or endowment that type investors which is appealing is the primary reason they exist.

1. Access to unique opportunities not available in public markets like startups, emerging companies, or private businesses.

2. Active Involvement and influence.

3. Tax Advantages like tax credits, deductions, or exemptions. These tax advantages can help reduce the overall tax liability for investors

I know VERY successful VC's. But most of the funds don't return well.

There's a good video on PE if you're interested.

If you're looking for a banger (as a value investor and not a trader), I would do what Peter Lynch suggested, and look in the small to mid caps.

I love ETF's, I love mutual funds as long as they're indexed. An ETF can be actively managed (like ARK), an ETF can be passively managed. A mutual fund can be actively managed, a mutual fund can be passively managed.

An ETF is an exchange traded fund is a collection of stocks that allows you follow an index like the S&P500, a company size or a particular sector or industry.

All a mutual fund is, is a bunch of people pool their money together, hand it over to a manger, who can be a manager of a passive fund, you still need a somebody watching your passive fund. And that manager, manages the funds according to the fund's investment objectives. VT is an ETF and it trades throughout the day. VTWAX is the VT equivalent mutual fund. It tracks the total market, it's an index mutual fund. I think for somebody that is tempted to trade, you may not even want to buy ETF's and just buy mutual funds. The reason I've liked mutual funds until recently is that they allow you to automatically reinvest. I can setup an automatic contribution to my mutual fund because it goes in there and it settles at the end of the day. Until very recently it was very hard to automatically invest in ETF's because you have to put money in your brokerage and then during at least set an order then buy it during the trading day which is a pain in the neck. With a mutual fund, it's convenient, it just goes in so you don't have to think about it. Apparently with Fidelity now you can do auto investing with ETF's. I haven't even looked into that which is something I will consider. So for most people it might be good to avoid ETF's all together. Jack Bogle was against ETF's and I actually with him to an extent. If you look at the data behind ETF's, people trade them, they don't hold them long-run. Even like S&P500. There's a lot less trading with mutual funds because they don't change value during the day. That helps a lot of people hold onto their investments over the long-run which is a very important behavior.

VTWAX has a .1% expense ratio. VTSAX which is Vanguard's total market index has a .40% expense ratio. So it's .01% more expensive than the ETF equivalent and you can automatically invest in it and you're less tempted to trade it. Index mutual funds don't have insane fees. In my mind the big ones out there are VOO, VTI and VT.

I can elaborate further if you'd like idk

Lmao. Wait btw, what's the difference between a mutual and index fund? I have a Roth IRA and deposited $6000 into it. I didn't use all of it to buy the shares of the fund though (I forgot if it was index or mutual, I'll have to check). I still have like $3000 in the account which I didn't invest. Should I invest the remaining money?

One of the first mistakes people make is when they put money in their 401K or IRA and they don't invest it. They just put it into a cash account and accrues 1% interest (now its 5% but that wont be for long) but it just grows very slowly or basically underperforms inflation in the long-run because they don't invest it. Time costs money (waiting to invest).

 

[DarkRange55]

How do you think that AI will impact this field? Will AI replace people in it? Or will AI be combined with human judgement and used as a tool instead? Can you trust AI's predictions? Are they accurate?

Probably help people for the time being, but also cause feedback loops. Robo advisors are popular now. Read about the flash crash

2010 flash crash - Wikipedia

en.wikipedia.org

What do you think? Should people get new jobs?

 

[DarkRange55]

All ways.

Lol why are you on the forum then

How do I make money now:

I played poker myself back when I was younger when I couldn't make any more money in prop trading. I moved into playing poker and I left because of my godfather, I was making like 2-3 grand a month and my godfather talked me out of it. Said it wasn't a real job and didn't know if you were playing against bots. And this was in the past, huge mistake. I was sitting on a lot of cash from trading, I wasn't able to make any more money as a pro trader and I really missed the boat on all those good juicy years of poker. Thats one thing that poker players will tell me. Its not as good as it used to be. The fish aren't like what they used to be. There's a lot more sharks. Poker's not as hot as it used to be because it was a really big thing maybe eight six seven twelve years ago when everyone was watching these tournaments on TV. Its not as hot as it used to be and there's just a lot less action. And the software is so good it sort of leveled the playing field a lot. I have one friend who used to do the algorithms by hand. He would read the mathematics books on poker. Now everybody has an algorithm so it sort of leveled the playing field a bit. And the money perhaps isn't what it used to be. But its still six figures, the top guys online are still making 500 grand or whatever it is. There's still a lot of money to be made in poker.
One of my friends is one of the top online poker players in the world, and I am friends with some WSOP champions. But I am nowhere near that level at all.

I have a job, so I do work.

I also have a growing portfolio of real estate mainly apartments. I also have a small hobby farm with water rights. I lease out a portion of the land to one of my neighbors for his cattle to graze so I get an agricultural zoning, which gives me a large tax benefit. Plus real estate taxes for Forest Crop or CRP land gives tax breaks. I have land that the Forest service gives me a Real Estate tax credit for letting them manage the land, but I can't post it off to the public for hunting. I've also considered having a small Christmas tree farm if I acquire more land to get further tax breaks. And I've been considering renting out my condo in Southeast Asia because I try to stay there about half the year.
I am a minority investor in a small winery.
I have a lot of investments, mainly in equities (stock market), I have some investment grade art that I inherited, I have trust funds that I inherited. And some oil rights.
I own gold and silver, but that's more because I like to collect coins and I value them for the numismatic value.
I also own some shares in some family vacation properties that are very very high-end.
I'm also on the board of one of my families charities. So I get a salary from that in addition to everything else.

As for trading, sometimes I will take advantage when I see an opportunity.

 

[SexyIncél]

Thanks for the AMA!

Suppose someone's starting from scratch: less than 20k us$ savings, a couple small business contacts but not much

But! they've maxxed out some skills: software dev (world class & can deliver entire projects alone), graphic design, interpersonal/negotiation

What paths should they consider, to make maximum money in 1-2 years from the finance/investing world? Also, what do you recommend they learn? Including any book/vid/etc recommendations you may have

Or do you suggest more of a general mindset, as Soros says?

I would put it this way: I do not play according to a given set of rules; I look for changes in the rules of the game.

I work with hypotheses. I form a thesis about the anticipated sequence of events and then I compare the actual course of events with my thesis; that gives me a criterion by which I can evaluate my hypothesis.

So could that mean the following?

1. save 10k us$
2. get an overview of what one can conceivably invest in; understand every concept you mentioned in this thread
3. get case studies. Start making theories & compare with history
4. start putting your money where your theories are
5. start asking what finance/investors' pain points are, helping them & thereby building relationships & gaining knowledge

Or do you have better ideas?

 

[DarkRange55]

How do I make money now:

I played poker myself back when I was younger when I couldn't make any more money in prop trading. I moved into playing poker and I left because of my godfather, I was making like 2-3 grand a month and my godfather talked me out of it. Said it wasn't a real job and didn't know if you were playing against bots. And this was in the past, huge mistake. I was sitting on a lot of cash from trading, I wasn't able to make any more money as a pro trader and I really missed the boat on all those good juicy years of poker. Thats one thing that poker players will tell me. Its not as good as it used to be. The fish aren't like what they used to be. There's a lot more sharks. Poker's not as hot as it used to be because it was a really big thing maybe eight six seven twelve years ago when everyone was watching these tournaments on TV. Its not as hot as it used to be and there's just a lot less action. And the software is so good it sort of leveled the playing field a lot. I have one friend who used to do the algorithms by hand. He would read the mathematics books on poker. Now everybody has an algorithm so it sort of leveled the playing field a bit. And the money perhaps isn't what it used to be. But its still six figures, the top guys online are still making 500 grand or whatever it is. There's still a lot of money to be made in poker.
One of my friends is one of the top online poker players in the world, and I am friends with some WSOP champions. But I am nowhere near that level at all.

I have a job, so I do work.

I also have a growing portfolio of real estate mainly apartments. I also have a small hobby farm with water rights. I lease out a portion of the land to one of my neighbors for his cattle to graze so I get an agricultural zoning, which gives me a large tax benefit. Plus real estate taxes for Forest Crop or CRP land gives tax breaks. I have land that the Forest service gives me a Real Estate tax credit for letting them manage the land, but I can't post it off to the public for hunting. I've also considered having a small Christmas tree farm if I acquire more land to get further tax breaks. And I've been considering renting out my condo in Southeast Asia because I try to stay there about half the year.
I am a minority investor in a small winery.
I have a lot of investments, mainly in equities (stock market), I have some investment grade art that I inherited, I have trust funds that I inherited. And some oil rights.
I own gold and silver, but that's more because I like to collect coins and I value them for the numismatic value.
I also own some shares in some family vacation properties that are very very high-end.
I'm also on the board of one of my families charities. So I get a salary from that in addition to everything else.

As for trading, sometimes I will take advantage when I see an opportunity.

I'd be very careful on speculating because it's like the equities, Bond, Options and other markets. The people that manage the hundreds of billion and a few trillion dollar portfolios manipulate the market for their and client's benefit, not ours. But, it's as it is at a Poker table, when you look around the table to identify who are the fish, and you don't see any... then you are the fish.

I have invested in certain wineries'
future delivery of specific vintages, such as Lafitte, Margaux, Petraeus, etc at a buy now price. By the time the bottles are released I've made, from a couple hundred to $1,200, depending on the quality and reviews from top guys at Wine Spectator, James Suckling, Jack Daniel's, etc. But, you could pay $600/bottle for a a certain vintage of a case of Lafitte and it could take years for it to appreciate, if at all. But the very good vintages are valued, Priced In to the market, before it's even offered. So don't be a Fish.

 

[SexyIncél]

Suppose someone's starting from scratch: less than 20k us$ savings, a couple small business contacts but not much

Hmm, in retrospect, I think the only sensible way is to first build capital by delivering projects for people with ideas but no reasonable access to good software skills. Make a whole bunch of apps & find the one that'll generate revenue. Become a mini-domain expert in their domains

Investment: money generating money. Software: apps generating money

Then you can invest, from a more knowledgeable perspective, by watching for opportunities in those domains. Where you have contacts who'll educate you

 

[sserafim]

Probably help people for the time being, but also cause feedback loops. Robo advisors are popular now. Read about the flash crash

2010 flash crash - Wikipedia

en.wikipedia.org

What do you think? Should people get new jobs?

Idk. I don't know anything about this field and have no knowledge of it whatsoever, so I wouldn't know. Btw, what jobs do you think will be replaced by AI and what jobs do you think will be safe from it?

 

[DarkRange55]

Hmm, in retrospect, I think the only sensible way is to first build capital by delivering projects for people with ideas but no reasonable access to good software skills. Make a whole bunch of apps & find the one that'll generate revenue. Become a mini-domain expert in their domains

Investment: money generating money. Software: apps generating money

Then you can invest, from a more knowledgeable perspective, by watching for opportunities in those domains. Where you have contacts who'll educate you

I'll try to get back to you in the near future. I'm presently on another ski trip

 

[Praestat_Mori]

Not specifically a question how to manage multi-millions and billions but how would you try to recover if you were in an age range of 45-55? (Financial recovery!)

Goal would be 1-2 million until "retirement" which equals a time span of about 10-15 years (max. 20-25 years).

Any real chance without highly speculative products, without extraordinary luck, without a breakthrough business idea?

 

[SexyIncél]

Is this true? "The investor values X by predicting how others will value X. This is complicated when others act similarly meta. The fish are at least 1 meta level below you"

 

[DarkRange55]

Is this true? "The investor values X by predicting how others will value X. This is complicated when others act similarly meta. The fish are at least 1 meta level below you"

Hmm, I'm not entirely sure what you mean? Lol you may need to edify / elaborate a bit

Thanks for the AMA!

Suppose someone's starting from scratch: less than 20k us$ savings, a couple small business contacts but not much

But! they've maxxed out some skills: software dev (world class & can deliver entire projects alone), graphic design, interpersonal/negotiation

What paths should they consider, to make maximum money in 1-2 years from the finance/investing world? Also, what do you recommend they learn? Including any book/vid/etc recommendations you may have

Or do you suggest more of a general mindset, as Soros says?


So could that mean the following?

1. save 10k us$
2. get an overview of what one can conceivably invest in; understand every concept you mentioned in this thread
3. get case studies. Start making theories & compare with history
4. start putting your money where your theories are
5. start asking what finance/investors' pain points are, helping them & thereby building relationships & gaining knowledge

Or do you have better ideas?

I'm back in town, I'll look over this later today.

 

[todienomore]

Whats your take on the mrna vaccines and covid? Im concerned we are headed into a mortality/fertility/cognitive health crisis via either or both of those things.

Do you think elites favor a system reset and/or depopulation?

 

[DarkRange55]

Hmm, in retrospect, I think the only sensible way is to first build capital by delivering projects for people with ideas but no reasonable access to good software skills. Make a whole bunch of apps & find the one that'll generate revenue. Become a mini-domain expert in their domains

Investment: money generating money. Software: apps generating money

Then you can invest, from a more knowledgeable perspective, by watching for opportunities in those domains. Where you have contacts who'll educate you

I would need more information to accurately respond to your question or to ask around about it.

My mom's neighbors make good money and make apps for a living. I know some very, very successful software entrepreneurs and VC's but it's not exactly 100% my area of expertise. I've tried my hand at some startups. Three of which were tech and they didn't pan out well (one was so close to making it).

I did a VC apprenticeship that was fairly selective. But:
1. sure I've done some startups, but let's be honest, am I going to sit on boards without some track record and advise founders managing large teams in hyper growth?
No.
2. Not enough deal experience a la banking can hurt
3. It takes an average of 7-10 years due to fund lifecycle to know if one is even good at VC. Plus not getting any carry unless Senior Assoc./Partner. Less pay than banking usually.
To me it seems VC is best as a later career move it one just loves the startup eco/has a track record of entrepreneurship.

Again, I would need more information to accurately respond to your question or to ask around about it.

General startup advice:

Everything new takes twice as long and costs three times as you expect, so keep plenty in reserve.

No deal is better than a bad deal.

Make sure to work on things that you enjoy


With stocks:

In the book A Ransom Walk Down Wall Street, it says buying individual stocks is random and they go up and down randomly. If you look at every stock picker, some stocks go massively up and some massively down. The question is, are you really good at stock picking or are you just lucky if a lot of the stocks you bought recently went up a lot? It might just be a thing of probability where there's one person thar buys ten stocks and they all go up. It could just be pure luck like flipping a coin. Sometimes stock with high PE ratios are undervalued.

Almost all people don't know what they are doing and even many knowledgeable people are wrong. (Especially long term).

It takes a lot of work to accurately pick stocks. I think the technicals have zero value outside of a few days, which means the returns are not worth it.

To be good you need to have more understanding of a business, its competitors, the industry, and the macro than most everyone, and the money to invest in research.

I think it's a better investment for most people to focus on doing well at their day job.

99% of people are better off maxing their tax advantaged accounts (401K & Roth IRA) DCA into low-cost broadly diversified index funds. Have a good emergency fund maybe $20k in cash or cash equivalent (if your roof goes out, your HVAC fails, car problems, loose your job, ect. beats putting it on a credit card).

Index funds ideally provide basically a blank and then you can take some remaining money and try to (play around) pick some stocks that you think will outperform.

For the remaining 1-5% of a portfolio, I'd probably pick five small/mid cap companies that have the potential to 10x in 5-10 years. Like Peter Lynch suggests.

There's no one metric that works and if the metric does work, it's probably a fluke. Because if a metric like that was so easy, everybody would do it — Kind of I guess. There are usually known market rates / case examples of multiples, but you can make different assumptions on the underlining number the multiple is based on. Like for example say the consensus for Acme Company's revenue next year is 1B and the multiple is 5x.. but say I think it will do 1.2B. Then if I'm right it could be a good investment because consensus for something wrong.

As a general rule, one should always buy the undervalued asset - If you can identify before others. Very hard.

Most are not able to pick winners in long run -- sometimes you get lucky.

Here's the thing about gold for example - it shows the fundamental misunderstandings that humans have with money. People think it's as simple as a certain thing, like a an asset class like gold or real estate. You'll hear people tell you flip houses or get duplexes or invest in silver, invest in commodities. Warren Buffet said, (these numbers approximations but) it's something like all the gold in the world is worth ~$13.7 trillion. But all the farmland in America is worth only ~$2.7 trillion. But that's somewhat of a make believe value, it's just supply and demand, right? So he said it's not like one day people wake up and want more jewelry, gold or silver. So he said what would you rather have? He said all the farm land in the United States is only worth $2.7 trillion. And he said this is how crazy people get and how things get driven up by the media telling you gold, gold, gold. And I had some friends a few years ago I told him don't just invest in one thing unless you really know a lot about it.
Now if you're an expert in gold, if you understand mining if you understand new technologies this is different. But I'm just talking about you and I, I'm assuming you're not an expert in gold. So what you want to do instead, Warren Buffet talks about and I've taken and adopted his philosophy over the years in my life is the best investment in general is things that produce real value.

Buffet's old adage about invest in what you know…

I think as the world becomes increasingly complex and sophisticated, you need to become more and more specialized.

Did you say you're looking for book recommendations?

Not specifically a question how to manage multi-millions and billions but how would you try to recover if you were in an age range of 45-55? (Financial recovery!)

Goal would be 1-2 million until "retirement" which equals a time span of about 10-15 years (max. 20-25 years).

Any real chance without highly speculative products, without extraordinary luck, without a breakthrough business idea?

The safest and most conservative thing would be the max tax advantage accounts, buy index funds, save as much as possible, live below your means and expect to retire later.

Stocks will likely return a lot more over a 30 year time period. You don't really need bonds if you have a very long time horizon. But if you need money and you need it soon you should 100% either be in short term really safe bonds or if you're in the US in an FDIC insured bank account. Theoretically, want some type of cushion to guarantee to generate income in retirement if the market is flat for a few years like how the Nikkei was in the 1990's. When I get older is probably have a couple years of expenses in something like the iShares 0-3 Monthly Treasury Bond ETF. It barely fluctuates even with interest rates going crazy. It fluctuates because when they pay out the interest rate to the holders it drops by the amount payed out. For short term federal government debt its not very volatile. The first risk is that you hold too many bonds too soon. The longer the duration of the bond the longer the average bond takes to mature the more sensitive it is to interest rate risk. It turns out that stock and bond prices are actually not inversely correlated. US federal government bonds are probably safe as it gets besides FDIC insurance. Treasuries (and municipal bonds) are also sometimes tax inefficient.

 

[SexyIncél]

Did you say you're looking for book recommendations?

Yes, please!

To be good you need to have more understanding of a business, its competitors, the industry, and the macro than most everyone, and the money to invest in research.

Ah gotcha... so the tech person might want to invest in tech stocks in companies where they have friends in different departments & can connect the dots far better than most. And manage risk, because there's always unforseen events

Hmm, I'm not entirely sure what you mean? Lol you may need to edify / elaborate a bit

Ah sorry for being obscure. I mean:

Norman Normie buys a painting because he likes how it looks. But Iris Investor buys it because she predicts a bunch of fish like Norman will value it more in a couple years. Because the painter's doing all the right things & getting press. Simple supply & demand

She's one meta-level above Norman Normie. She doesn't buy it for its direct value, but for how others value it

But! More investors come along. Now Iris Investor now has to model how they value the art too — not just the normies. So she can better predict how to buy/sell. Getting complex! Maybe they use art as a tax-free currency at freeports. And introduce bubbles — where the "laws" of supply/demand don't hold

Unbeknownst to Iris: there's sophisticated investors a meta-level above her — who see her as the fish! They engineer crashes. Like a hoax that undermines the painter's reputation for a couple weeks — so she maybe sells to them in a panic — then afterwards, his name is restored, with tons of free press attention that raise his paintings' value

 

[sserafim]

Hedge fund question, I would also add:
Do you wonder why hedge fund managers are wealthy...They make money no matter how bad they perform.
It's kind of like the ones that do well have inside knowledge that the public is not able to get ahold of...legally.

As for PE/VC - it the diversification benefit for institutional or endowment that type investors which is appealing is the primary reason they exist.

1. Access to unique opportunities not available in public markets like startups, emerging companies, or private businesses.

2. Active Involvement and influence.

3. Tax Advantages like tax credits, deductions, or exemptions. These tax advantages can help reduce the overall tax liability for investors

I know VERY successful VC's. But most of the funds don't return well.

There's a good video on PE if you're interested.

If you're looking for a banger (as a value investor and not a trader), I would do what Peter Lynch suggested, and look in the small to mid caps.

I love ETF's, I love mutual funds as long as they're indexed. An ETF can be actively managed (like ARK), an ETF can be passively managed. A mutual fund can be actively managed, a mutual fund can be passively managed.

An ETF is an exchange traded fund is a collection of stocks that allows you follow an index like the S&P500, a company size or a particular sector or industry.

All a mutual fund is, is a bunch of people pool their money together, hand it over to a manger, who can be a manager of a passive fund, you still need a somebody watching your passive fund. And that manager, manages the funds according to the fund's investment objectives. VT is an ETF and it trades throughout the day. VTWAX is the VT equivalent mutual fund. It tracks the total market, it's an index mutual fund. I think for somebody that is tempted to trade, you may not even want to buy ETF's and just buy mutual funds. The reason I've liked mutual funds until recently is that they allow you to automatically reinvest. I can setup an automatic contribution to my mutual fund because it goes in there and it settles at the end of the day. Until very recently it was very hard to automatically invest in ETF's because you have to put money in your brokerage and then during at least set an order then buy it during the trading day which is a pain in the neck. With a mutual fund, it's convenient, it just goes in so you don't have to think about it. Apparently with Fidelity now you can do auto investing with ETF's. I haven't even looked into that which is something I will consider. So for most people it might be good to avoid ETF's all together. Jack Bogle was against ETF's and I actually with him to an extent. If you look at the data behind ETF's, people trade them, they don't hold them long-run. Even like S&P500. There's a lot less trading with mutual funds because they don't change value during the day. That helps a lot of people hold onto their investments over the long-run which is a very important behavior.

VTWAX has a .1% expense ratio. VTSAX which is Vanguard's total market index has a .40% expense ratio. So it's .01% more expensive than the ETF equivalent and you can automatically invest in it and you're less tempted to trade it. Index mutual funds don't have insane fees. In my mind the big ones out there are VOO, VTI and VT.

I can elaborate further if you'd like idk

One of the first mistakes people make is when they put money in their 401K or IRA and they don't invest it. They just put it into a cash account and accrues 1% interest (now its 5% but that wont be for long) but it just grows very slowly or basically underperforms inflation in the long-run because they don't invest it. Time costs money (waiting to invest).

Could you elaborate further? Btw it's an index fund. It's a Roth IRA (VFIAX/Vanguard 500 Index Admiral CL).

 

[todienomore]

Do you think the US economy will crash in the next decade?

I know my last post made sound like a qanon believer but Im not sure how depopulation wouldnt make sense. We are wasting the resources needed for the tech singularity and excess humans are just here to train ai. Thats how i see the next 50yrs going. Free range humans are dangerous and obsolete from the systems perspective.

 

[DarkRange55]

Could you elaborate further? Btw it's an index fund. It's a Roth IRA (VFIAX/Vanguard 500 Index Admiral CL).

Do you think the US economy will crash in the next decade?

I know my last post made sound like a qanon believer but Im not sure how depopulation wouldnt make sense. We are wasting the resources needed for the tech singularity and excess humans are just here to train ai. Thats how i see the next 50yrs going. Free range humans are dangerous and obsolete from the systems perspective.

Crash like depression or crash like 2000 dot com bubble?

 

[todienomore]

Crash like depression or crash like 2000 dot com bubble?

Depression tier, how long do you think the US dollar can keep going? Like US debt is going parabolic.

Is there any basic forecasters or commentators you recommend following? I just dont trust anyone online with any prominence anymore.

 

[DarkRange55]

Some of these questions will require formating a formal response. I'll do my best to get back to everyone later tonight.

 

[DarkRange55]

Unfortunately, I have continued to receive backlash for discussing economics topics so it's probably best that I minimize people's bickering over these topics and cease financial discussions. Sorry to all interested parties that actually have enjoyed these discussions. But clearly the community as a whole does not agree with this sentiment.

 

[sserafim]

Unfortunately, I have continued to receive backlash for discussing economics topics so it's probably best that I minimize people's bickering over these topics and cease financial discussions. Sorry to all interested parties that actually have enjoyed these discussions. But clearly the community as a whole does not agree with this sentiment.

No…I would love to hear about them. They were very interesting and insightful. Could you at least answer my question?

 

[SexyIncél]

Unfortunately, I have continued to receive backlash for discussing economics topics so it's probably best that I minimize people's bickering over these topics and cease financial discussions. Sorry to all interested parties that actually have enjoyed these discussions. But clearly the community as a whole does not agree with this sentiment.

Yowza, is this taking place in PMs? I haven't seen any of it. What madness. These made-up points we call "money" lead many here to ctb. So why would anyone exert pressure against discussing it..?

 

[4am]

Unfortunately, I have continued to receive backlash for discussing economics topics so it's probably best that I minimize people's bickering over these topics and cease financial discussions. Sorry to all interested parties that actually have enjoyed these discussions. But clearly the community as a whole does not agree with this sentiment.

oh no, did they patch chatgpt

 

[sserafim]

What's your current job?

 

[DarkRange55]

Yes, please!


Ah gotcha... so the tech person might want to invest in tech stocks in companies where they have friends in different departments & can connect the dots far better than most. And manage risk, because there's always unforseen events


Ah sorry for being obscure. I mean:

Norman Normie buys a painting because he likes how it looks. But Iris Investor buys it because she predicts a bunch of fish like Norman will value it more in a couple years. Because the painter's doing all the right things & getting press. Simple supply & demand

She's one meta-level above Norman Normie. She doesn't buy it for its direct value, but for how others value it

But! More investors come along. Now Iris Investor now has to model how they value the art too — not just the normies. So she can better predict how to buy/sell. Getting complex! Maybe they use art as a tax-free currency at freeports. And introduce bubbles — where the "laws" of supply/demand don't hold

Unbeknownst to Iris: there's sophisticated investors a meta-level above her — who see her as the fish! They engineer crashes. Like a hoax that undermines the painter's reputation for a couple weeks — so she maybe sells to them in a panic — then afterwards, his name is restored, with tons of free press attention that raise his paintings' value

For paintings?
Probably, I think of it as kind of like a spider web of influence.

I have a few clients that deal in art. It's like pump and dump and you don't want to hold on to the hot art piece, when it becomes obsolete. You'll lose your ass if you don't know what everyone else is doing. - you can't trust any big sales since I learned how easy it is to just buy your own at a super high price to set a floor price that is way high. The entire art world does this. It's basic commodities trading on the public market.
Not a commodity -- some idea of collectors market and high end conspicuous consumption of luxury goods.

If you're investing at the top end, you're betting on a continuing appreciation of luxury goods. It's no different than watches, collectible cars, etc…
More like you're speculating in a world awash in dirty Chinese and Russian money. A lot of this luxury stuff is just a way to move money around the world by kleptocrats enriched by easy money policies in the West. Seems like an easy way to make a buck if you've been in the biz for a while and know what you're doing. Seems like an easy way to lose a lot if you don't know what you're trying to do.

Collectables do not have fundamental values

I am guessing what you described happens. There are so many creative ways to get money these days I'm never surprised when I read about a new scam. The best salesmen simply connect a willing buyer with a willing seller or vice versa - salesmen have no morals or empathy for their clients - it's about making the deal - the risk the excitement the chance of failure - the glories of success. The constellation of the best - say 10 of the top 20 of the best of whatever for a year will not be in the group the next year or two and then say 4 of the 10 may be in the top 20 in year 4 or 5 and then out again and then some new ones back in year 7 and 8. I want the one that is in the top 20 say 3 times in 10 years. That would be outstanding.

Collectibles is whole different area that is far from fundamental value investing. Never my thing as a fundamental investor. Not an area I'm familiar with but personally would value it like any other collectible e.g. stamps, baseball cards, etc. It's worth what someone is willing to pay.... Has no income stream so cannot apply any kind of discounted cash flow analysis or normal value metric.
I inherited some investment grade artwork. My dad, his brother and one of their uncles are world-class art collectors.

Certain artworks hold their value during bad economic times. Appreciation is better than the market lately, and museums will pay dearly for that one art piece that draws people to their museum. Art is a very unusual investment. Its value is based on the flavor of the day.... Let the professionals do it.
I have never understood the collectables market.
Collectors are fickle. Clearly a matter of tastes and culture. Who knows more about art markets and values.

Section 1031 not available for art anymore. As long as you're not a dealer in art, the charitable donation is a good option, but requires a tax appraisal and it's under scrutiny at this time with the IRS. Also, the tax deduction is limited to offset 30% of your Adjusted Gross Income, per year, with the unused tax deduction to carry forward to future years, not to exceed 5 years, I believe.
The appraiser has to "independent" (not a friend), and provide a special tax basis Fair Market Value(FMV) appraisal of the artwork. Charitable artwork appraisals are a specialty field. The cost of the appraisal is nondeductible. The Artist personallyattribution rules apply) can NOT be the one getting the charitable deduction. The artist can only get their out-of-pocket costs as a charitable deduction as long as the artwork's FMV is greater than the cost. So, there really is not a "tax" incentive for an artist to donate their personal works of art.

But they're not 1) earning dividends or interest 2) nor are easily sold if needed.
And I'm not sure that $10K art is likely to appreciate. Might need $100K!
Buy and put on wall only if you really like looking at it!
Art is like the antiques market - whats in vogue. It doesn't always appreciate.

Although there are risks involved with fire, damage, etc.

For paintings?
Probably, I think of it as kind of like a spider web of influence.

I have a few clients that deal in art. It's like pump and dump and you don't want to hold on to the hot art piece, when it becomes obsolete. You'll lose your ass if you don't know what everyone else is doing. - you can't trust any big sales since I learned how easy it is to just buy your own at a super high price to set a floor price that is way high. The entire art world does this. It's basic commodities trading on the public market.
Not a commodity -- some idea of collectors market and high end conspicuous consumption of luxury goods.

If you're investing at the top end, you're betting on a continuing appreciation of luxury goods. It's no different than watches, collectible cars, etc…
More like you're speculating in a world awash in dirty Chinese and Russian money. A lot of this luxury stuff is just a way to move money around the world by kleptocrats enriched by easy money policies in the West. Seems like an easy way to make a buck if you've been in the biz for a while and know what you're doing. Seems like an easy way to lose a lot if you don't know what you're trying to do.

Collectables do not have fundamental values

I am guessing what you described happens. There are so many creative ways to get money these days I'm never surprised when I read about a new scam. The best salesmen simply connect a willing buyer with a willing seller or vice versa - salesmen have no morals or empathy for their clients - it's about making the deal - the risk the excitement the chance of failure - the glories of success. The constellation of the best - say 10 of the top 20 of the best of whatever for a year will not be in the group the next year or two and then say 4 of the 10 may be in the top 20 in year 4 or 5 and then out again and then some new ones back in year 7 and 8. I want the one that is in the top 20 say 3 times in 10 years. That would be outstanding.

Collectibles is whole different area that is far from fundamental value investing. Never my thing as a fundamental investor. Not an area I'm familiar with but personally would value it like any other collectible e.g. stamps, baseball cards, etc. It's worth what someone is willing to pay.... Has no income stream so cannot apply any kind of discounted cash flow analysis or normal value metric.
I inherited some investment grade artwork. My dad, his brother and one of their uncles are world-class art collectors.

Certain artworks hold their value during bad economic times. Appreciation is better than the market lately, and museums will pay dearly for that one art piece that draws people to their museum. Art is a very unusual investment. Its value is based on the flavor of the day.... Let the professionals do it.
I have never understood the collectables market.
Collectors are fickle. Clearly a matter of tastes and culture. Who knows more about art markets and values.

Section 1031 not available for art anymore. As long as you're not a dealer in art, the charitable donation is a good option, but requires a tax appraisal and it's under scrutiny at this time with the IRS. Also, the tax deduction is limited to offset 30% of your Adjusted Gross Income, per year, with the unused tax deduction to carry forward to future years, not to exceed 5 years, I believe.
The appraiser has to "independent" (not a friend), and provide a special tax basis Fair Market Value(FMV) appraisal of the artwork. Charitable artwork appraisals are a specialty field. The cost of the appraisal is nondeductible. The Artist personallyattribution rules apply) can NOT be the one getting the charitable deduction. The artist can only get their out-of-pocket costs as a charitable deduction as long as the artwork's FMV is greater than the cost. So, there really is not a "tax" incentive for an artist to donate their personal works of art.

But they're not 1) earning dividends or interest 2) nor are easily sold if needed.
And I'm not sure that $10K art is likely to appreciate. Might need $100K!
Buy and put on wall only if you really like looking at it!
Art is like the antiques market - whats in vogue. It doesn't always appreciate.

Although there are risks involved with fire, damage, etc.

Also those art ETF's can be misleading…
I can link below if interested

For paintings?
Probably, I think of it as kind of like a spider web of influence.

I have a few clients that deal in art. It's like pump and dump and you don't want to hold on to the hot art piece, when it becomes obsolete. You'll lose your ass if you don't know what everyone else is doing. - you can't trust any big sales since I learned how easy it is to just buy your own at a super high price to set a floor price that is way high. The entire art world does this. It's basic commodities trading on the public market.
Not a commodity -- some idea of collectors market and high end conspicuous consumption of luxury goods.

If you're investing at the top end, you're betting on a continuing appreciation of luxury goods. It's no different than watches, collectible cars, etc…
More like you're speculating in a world awash in dirty Chinese and Russian money. A lot of this luxury stuff is just a way to move money around the world by kleptocrats enriched by easy money policies in the West. Seems like an easy way to make a buck if you've been in the biz for a while and know what you're doing. Seems like an easy way to lose a lot if you don't know what you're trying to do.

Collectables do not have fundamental values

I am guessing what you described happens. There are so many creative ways to get money these days I'm never surprised when I read about a new scam. The best salesmen simply connect a willing buyer with a willing seller or vice versa - salesmen have no morals or empathy for their clients - it's about making the deal - the risk the excitement the chance of failure - the glories of success. The constellation of the best - say 10 of the top 20 of the best of whatever for a year will not be in the group the next year or two and then say 4 of the 10 may be in the top 20 in year 4 or 5 and then out again and then some new ones back in year 7 and 8. I want the one that is in the top 20 say 3 times in 10 years. That would be outstanding.

Collectibles is whole different area that is far from fundamental value investing. Never my thing as a fundamental investor. Not an area I'm familiar with but personally would value it like any other collectible e.g. stamps, baseball cards, etc. It's worth what someone is willing to pay.... Has no income stream so cannot apply any kind of discounted cash flow analysis or normal value metric.
I inherited some investment grade artwork. My dad, his brother and one of their uncles are world-class art collectors.

Certain artworks hold their value during bad economic times. Appreciation is better than the market lately, and museums will pay dearly for that one art piece that draws people to their museum. Art is a very unusual investment. Its value is based on the flavor of the day.... Let the professionals do it.
I have never understood the collectables market.
Collectors are fickle. Clearly a matter of tastes and culture. Who knows more about art markets and values.

Section 1031 not available for art anymore. As long as you're not a dealer in art, the charitable donation is a good option, but requires a tax appraisal and it's under scrutiny at this time with the IRS. Also, the tax deduction is limited to offset 30% of your Adjusted Gross Income, per year, with the unused tax deduction to carry forward to future years, not to exceed 5 years, I believe.
The appraiser has to "independent" (not a friend), and provide a special tax basis Fair Market Value(FMV) appraisal of the artwork. Charitable artwork appraisals are a specialty field. The cost of the appraisal is nondeductible. The Artist personallyattribution rules apply) can NOT be the one getting the charitable deduction. The artist can only get their out-of-pocket costs as a charitable deduction as long as the artwork's FMV is greater than the cost. So, there really is not a "tax" incentive for an artist to donate their personal works of art.

But they're not 1) earning dividends or interest 2) nor are easily sold if needed.
And I'm not sure that $10K art is likely to appreciate. Might need $100K!
Buy and put on wall only if you really like looking at it!
Art is like the antiques market - whats in vogue. It doesn't always appreciate.

Although there are risks involved with fire, damage, etc.

Also those art ETF's can be misleading…
I can link below if interested

My dad's uncle who is still alive but very old bought a $2 million painting from Sweden and didn't like it so he ended up donating it…

For paintings?
Probably, I think of it as kind of like a spider web of influence.

I have a few clients that deal in art. It's like pump and dump and you don't want to hold on to the hot art piece, when it becomes obsolete. You'll lose your ass if you don't know what everyone else is doing. - you can't trust any big sales since I learned how easy it is to just buy your own at a super high price to set a floor price that is way high. The entire art world does this. It's basic commodities trading on the public market.
Not a commodity -- some idea of collectors market and high end conspicuous consumption of luxury goods.

If you're investing at the top end, you're betting on a continuing appreciation of luxury goods. It's no different than watches, collectible cars, etc…
More like you're speculating in a world awash in dirty Chinese and Russian money. A lot of this luxury stuff is just a way to move money around the world by kleptocrats enriched by easy money policies in the West. Seems like an easy way to make a buck if you've been in the biz for a while and know what you're doing. Seems like an easy way to lose a lot if you don't know what you're trying to do.

Collectables do not have fundamental values

I am guessing what you described happens. There are so many creative ways to get money these days I'm never surprised when I read about a new scam. The best salesmen simply connect a willing buyer with a willing seller or vice versa - salesmen have no morals or empathy for their clients - it's about making the deal - the risk the excitement the chance of failure - the glories of success. The constellation of the best - say 10 of the top 20 of the best of whatever for a year will not be in the group the next year or two and then say 4 of the 10 may be in the top 20 in year 4 or 5 and then out again and then some new ones back in year 7 and 8. I want the one that is in the top 20 say 3 times in 10 years. That would be outstanding.

Collectibles is whole different area that is far from fundamental value investing. Never my thing as a fundamental investor. Not an area I'm familiar with but personally would value it like any other collectible e.g. stamps, baseball cards, etc. It's worth what someone is willing to pay.... Has no income stream so cannot apply any kind of discounted cash flow analysis or normal value metric.
I inherited some investment grade artwork. My dad, his brother and one of their uncles are world-class art collectors.

Certain artworks hold their value during bad economic times. Appreciation is better than the market lately, and museums will pay dearly for that one art piece that draws people to their museum. Art is a very unusual investment. Its value is based on the flavor of the day.... Let the professionals do it.
I have never understood the collectables market.
Collectors are fickle. Clearly a matter of tastes and culture. Who knows more about art markets and values.

Section 1031 not available for art anymore. As long as you're not a dealer in art, the charitable donation is a good option, but requires a tax appraisal and it's under scrutiny at this time with the IRS. Also, the tax deduction is limited to offset 30% of your Adjusted Gross Income, per year, with the unused tax deduction to carry forward to future years, not to exceed 5 years, I believe.
The appraiser has to "independent" (not a friend), and provide a special tax basis Fair Market Value(FMV) appraisal of the artwork. Charitable artwork appraisals are a specialty field. The cost of the appraisal is nondeductible. The Artist personallyattribution rules apply) can NOT be the one getting the charitable deduction. The artist can only get their out-of-pocket costs as a charitable deduction as long as the artwork's FMV is greater than the cost. So, there really is not a "tax" incentive for an artist to donate their personal works of art.

But they're not 1) earning dividends or interest 2) nor are easily sold if needed.
And I'm not sure that $10K art is likely to appreciate. Might need $100K!
Buy and put on wall only if you really like looking at it!
Art is like the antiques market - whats in vogue. It doesn't always appreciate.

Although there are risks involved with fire, damage, etc.

Also those art ETF's can be misleading…
I can link below if interested

My dad's uncle who is still alive but very old bought a $2 million painting from Sweden and didn't like it so he ended up donating it…

But like you said, there are special tax haven ports…
.

Yeah I'd be interested I gotta say as a trader myself im impressed with your knowledge base.

So if algos control everything and your edge is dead how do you make money now?

Also why do u wanna ctb sounds like your apart of the 1%

Most billionaires have some sort of a family office and hire the best traders. To do what? Trade over micro connections to the exchanges. Also Private Equity and Hedge Funds.
Family offices have unlimited resources to hire the best people in the world. Some like Cascade (Bill Gates, I did a stint there and my dad knows him) and also a family office I know of in TX invests in hotels, for example.
Cascade also buys up farmland because it is countercyclical to the stock market and has outperformed the S&P for the last I think two or three decades if I remember correctly. I may have mentioned this above, but I can add links if interested. It is also an inflation hedge.

For paintings?
Probably, I think of it as kind of like a spider web of influence.

I have a few clients that deal in art. It's like pump and dump and you don't want to hold on to the hot art piece, when it becomes obsolete. You'll lose your ass if you don't know what everyone else is doing. - you can't trust any big sales since I learned how easy it is to just buy your own at a super high price to set a floor price that is way high. The entire art world does this. It's basic commodities trading on the public market.
Not a commodity -- some idea of collectors market and high end conspicuous consumption of luxury goods.

If you're investing at the top end, you're betting on a continuing appreciation of luxury goods. It's no different than watches, collectible cars, etc…
More like you're speculating in a world awash in dirty Chinese and Russian money. A lot of this luxury stuff is just a way to move money around the world by kleptocrats enriched by easy money policies in the West. Seems like an easy way to make a buck if you've been in the biz for a while and know what you're doing. Seems like an easy way to lose a lot if you don't know what you're trying to do.

Collectables do not have fundamental values

I am guessing what you described happens. There are so many creative ways to get money these days I'm never surprised when I read about a new scam. The best salesmen simply connect a willing buyer with a willing seller or vice versa - salesmen have no morals or empathy for their clients - it's about making the deal - the risk the excitement the chance of failure - the glories of success. The constellation of the best - say 10 of the top 20 of the best of whatever for a year will not be in the group the next year or two and then say 4 of the 10 may be in the top 20 in year 4 or 5 and then out again and then some new ones back in year 7 and 8. I want the one that is in the top 20 say 3 times in 10 years. That would be outstanding.

Collectibles is whole different area that is far from fundamental value investing. Never my thing as a fundamental investor. Not an area I'm familiar with but personally would value it like any other collectible e.g. stamps, baseball cards, etc. It's worth what someone is willing to pay.... Has no income stream so cannot apply any kind of discounted cash flow analysis or normal value metric.
I inherited some investment grade artwork. My dad, his brother and one of their uncles are world-class art collectors.

Certain artworks hold their value during bad economic times. Appreciation is better than the market lately, and museums will pay dearly for that one art piece that draws people to their museum. Art is a very unusual investment. Its value is based on the flavor of the day.... Let the professionals do it.
I have never understood the collectables market.
Collectors are fickle. Clearly a matter of tastes and culture. Who knows more about art markets and values.

Section 1031 not available for art anymore. As long as you're not a dealer in art, the charitable donation is a good option, but requires a tax appraisal and it's under scrutiny at this time with the IRS. Also, the tax deduction is limited to offset 30% of your Adjusted Gross Income, per year, with the unused tax deduction to carry forward to future years, not to exceed 5 years, I believe.
The appraiser has to "independent" (not a friend), and provide a special tax basis Fair Market Value(FMV) appraisal of the artwork. Charitable artwork appraisals are a specialty field. The cost of the appraisal is nondeductible. The Artist personallyattribution rules apply) can NOT be the one getting the charitable deduction. The artist can only get their out-of-pocket costs as a charitable deduction as long as the artwork's FMV is greater than the cost. So, there really is not a "tax" incentive for an artist to donate their personal works of art.

But they're not 1) earning dividends or interest 2) nor are easily sold if needed.
And I'm not sure that $10K art is likely to appreciate. Might need $100K!
Buy and put on wall only if you really like looking at it!
Art is like the antiques market - whats in vogue. It doesn't always appreciate.

Although there are risks involved with fire, damage, etc.

Also those art ETF's can be misleading…
I can link below if interested

My dad's uncle who is still alive but very old bought a $2 million painting from Sweden and didn't like it so he ended up donating it…

But like you said, there are special tax haven ports…
.

Most billionaires have some sort of a family office and hire the best traders. To do what? Trade over micro connections to the exchanges. Also Private Equity and Hedge Funds.
Family offices have unlimited resources to hire the best people in the world. Some like Cascade (Bill Gates, I did a stint there and my dad knows him) and also a family office I know of in TX invests in hotels, for example.
Cascade also buys up farmland because it is countercyclical to the stock market and has outperformed the S&P for the last I think two or three decades if I remember correctly. I may have mentioned this above, but I can add links if interested. It is also an inflation hedge.

Also, just another example, my dad's uncle speculates by buying antique Ferraris. At one point he owned the second most expensive Ferrari ever sold at auction.

 

[SexyIncél]

Thanks!

The best salesmen simply connect a willing buyer with a willing seller or vice versa - salesmen have no morals or empathy for their clients - it's about making the deal - the risk the excitement the chance of failure - the glories of success.

Yeah, I have a saleswoman friend in finance. I'd visit her at lunch & we'd laugh about all the lies she tells. She's kinda like photoshop — generally not an insane image of reality, but everything fixed & smoothed up to look attractive

Her brilliant boss had a culture where they think of themselves like hunters

And after all, they're in enterprise sales where they only need 3 sales out of 100 to do well. So they're jaded by all the volume, doing little tweaks to move a single percent

 

[DarkRange55]

Yes, please!


Ah gotcha... so the tech person might want to invest in tech stocks in companies where they have friends in different departments & can connect the dots far better than most. And manage risk, because there's always unforseen events


Ah sorry for being obscure. I mean:

Norman Normie buys a painting because he likes how it looks. But Iris Investor buys it because she predicts a bunch of fish like Norman will value it more in a couple years. Because the painter's doing all the right things & getting press. Simple supply & demand

She's one meta-level above Norman Normie. She doesn't buy it for its direct value, but for how others value it

But! More investors come along. Now Iris Investor now has to model how they value the art too — not just the normies. So she can better predict how to buy/sell. Getting complex! Maybe they use art as a tax-free currency at freeports. And introduce bubbles — where the "laws" of supply/demand don't hold

Unbeknownst to Iris: there's sophisticated investors a meta-level above her — who see her as the fish! They engineer crashes. Like a hoax that undermines the painter's reputation for a couple weeks — so she maybe sells to them in a panic — then afterwards, his name is restored, with tons of free press attention that raise his paintings' value

I suppose I should also add this in regards to artwork - As you know, there are and have been for centuries, people who are well enough educated or gifted who do collect, buy and sell and who are very monetarily successful. When Marcel Duchamp's urinal became defined as art everything changed.
I have some friends that loan out some of the artwork in their house to the New York Museum of Art. Sometimes they will donate some pieces for a small tax benefit.