lmm comments on Rationality Quotes Thread October 2015 - Less Wrong

3 Post author: elharo 03 October 2015 01:23PM

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Comment author: ike 16 October 2015 02:17:01PM 1 point [-]

Like it is easy for me to sit here and say to young people, one, you should invest in broad index funds, not funds concentrated in trendy areas like the Internet or clean technology, and, two, you should try to minimize fees instead of paying someone just to rebrand index funds for you. But you should drink tap water instead of Coke, too, and stay home and read Proust instead of blowing a whole month of your salary on Taylor Swift tickets. All consumption is dumb, if you think too hard about it. That's why it is consumption.

Matt Levine

Comment author: lmm 24 October 2015 06:06:38PM 4 points [-]

I think there's an analogy with "purchase fuzzies and utilons separately" here that Levine misses. If you want to be trendy and have a bunch of investment return in the future, it's probably more efficient to buy those two things from separate sources than to try and get both with a single product.

Comment author: ike 24 October 2015 06:41:16PM 0 points [-]

That's true, but he's talking from the company's side. If the target market are those that wouldn't invest at all, then the company could be providing real value overall.

I wouldn't use such a company, of course; but the target demo is not "people who think logically about investments unless they get fuzzies".

His argument is

  1. Let people spend their extra cash however they want
  2. This company seems likely to be a net utility plus for society

The fact that its users are still irrational seems irrelevant then, and it's reminding me of the whole "Copenhagen ethics" post (to make the analogy explicit, the company is being blamed for the fact that its users aren't perfect, even though they're better off than without the company.

Comment author: lmm 04 November 2015 01:11:38PM 0 points [-]

I think it's legitimate to criticise a company for pretending to sell utilons when it isn't. Yes, this company may well be a better use of your money than Taylor Swift tickets. But Taylor Swift isn't marketed as an investment.

Comment author: ike 06 November 2015 01:07:48AM -1 points [-]

They're selling hedons, which factor into people's utility functions.

I'd also point to

Stash, which is going after younger and less informed investors, instead sees it as its mission to get people to start putting away some amount of money in to the market and then get them into a more optimized portfolio over time.

"We’re going to be able to provide really solid advice around their portfolio around making smarter investor habits," Robinson said. And hopefully, for them, that's what young people believe in, like, and want.

That doesn't seem so objectionable. If they're attracting people who wouldn't be investing otherwise, that's a gain.

Also, do you have examples of their marketing that you think are inaccurate?

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