Public Service Announcement Collection

Eliezer Yudkowsky

P/S/A: There are single sentences which can create life-changing amounts of difference.

P/S/A: If you're not sure whether or not you've ever had an orgasm, it means you haven't had one, a condition known as primary anorgasmia which is 90% treatable by cognitive-behavioral therapy.
P/S/A: The people telling you to expect above-trend inflation when the Federal Reserve started printing money a few years back, disagreed with the market forecasts, disagreed with standard economics, turned out to be actually wrong in reality, and were wrong for reasonably fundamental reasons so don't buy gold when they tell you to.
P/S/A: There are many many more submissive/masochistic men in the world than there are dominant/sadistic women, so if you are a woman who feels a strong temptation to command men and inflict pain on them, and you want a large harem of men serving your every need, it will suffice to state this fact anywhere on the Internet and you will have fifty applications by the next morning.
P/S/A: Most of the personal-finance-advice industry is parasitic and/or self-deluded, and it's generally agreed on by economic theory and experimental measurement that an index fund will deliver the best returns you can get without huge amounts of effort.
P/S/A: If you are smart and underemployed, you can very quickly check to see if you are a natural computer programmer by pulling up a page of Python source code and seeing whether it looks like it makes natural sense, and if this is the case you can teach yourself to program very quickly and get a much higher-paying job even without formal credentials.

P/S/A: There are single sentences which can create life-changing amounts of difference.

P/S/A: If you're not sure whether or not you've ever had an orgasm, it means you haven't had one, a condition known as primary anorgasmia which is 90% treatable by cognitive-behavioral therapy.
P/S/A: The people telling you to expect above-trend inflation when the Federal Reserve started printing money a few years back, disagreed with the market forecasts, disagreed with standard economics, turned out to be actually wrong in reality, and were wrong for reasonably fundamental reasons so don't buy gold when they tell you to.
P/S/A: There are many many more submissive/masochistic men in the world than there are dominant/sadistic women, so if you are a woman who feels a strong temptation to command men and inflict pain on them, and you want a large harem of men serving your every need, it will suffice to state this fact anywhere on the Internet and you will have fifty applications by the next morning.
P/S/A: Most of the personal-finance-advice industry is parasitic and/or self-deluded, and it's generally agreed on by economic theory and experimental measurement that an index fund will deliver the best returns you can get without huge amounts of effort.
P/S/A: If you are smart and underemployed, you can very quickly check to see if you are a natural computer programmer by pulling up a page of Python source code and seeing whether it looks like it makes natural sense, and if this is the case you can teach yourself to program very quickly and get a much higher-paying job even without formal credentials.

I know enough economics that index funds being optimal for investors without special knowledge is obvious to me

I suspect I know more economics than you and that optimality is not obvious to me at all.

Let me ask you again the question which you sidestepped -- which market? An "index fund" is a shortcut for "passively managed diversified portfolio" and that's a very large territory.

Let's even assume market efficiency. First, investors are different. Let's take a few: a 25-year-old grad student in Singapore with $5,000; a 65-year old Canadian with about $5m saved for retirement; a 40-year-old Indian who has ten lakhs rupees with which he intends to open a business in a couple of years. None of them have "special knowledge" -- is the same investment vehicle optimal for all of them?

Second, I've still seen no argument as to why large-cap US equity (aka S&P500) is the best. Why is it better than a stock-and-bond mix, for example? Should you throw emerging market equity in there, too? it will increase diversification. And what about commodities? Strategy-based ETFs? They are all different and they will all increase the diversification of your portfolio -- under the EMH assumptions that's the only way you can win. Theoretically your portfolio should consist of all investable assets available and yet the usual recommendation is to invest in the S&P500-based index fund? That doesn't look optimal to me at all.

Third, what about leverage? I can easily double my leverage or halve it (by leaving half of my money in cash). What's the optimal leverage? Why would you consider the default leverage of 1 to be optimal?

Finance is hard.

Let me ask you again the question which you sidestepped -- which market?

How is recommending a specific fund sidestepping the question? If you mean that I sidestepped the meta question of "which method do you use for selecting which market?", then yes, I did. I don't think the value gained from researching that sort of topic is very high once you subtract the costs of researching. I also don't think the question of how much of one's wealth should be invested is very sensitive to the asset class that you choose to invest in for most investors. ... (read more)

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