> They expect the problem to worsen. The stock market has climbed 23% this year...<p>The problem will resolve itself if (when?) the market crashes.<p>I remember the run up to the dot-com bust. I was too much of a bumpkin at the time to even know how I would trade stocks — but I listened to an acquaintance go on and on about how much he was making on the market.<p>At the time I guessed that he was much smarter than me — that it would take me years to become as investment-savvy as this guy was.<p>In time, especially after the next bubble in 2008 when I had become more savvy, I came to see this guy as having been in the market at a time when even a monkey throwing darts could look like Warren Buffet.<p>So too I think are many of today's investors. (I would include myself but perhaps not: I have been won over by Boglism, a balanced portfolio, infrequent trading, etc.)
Many criticize the retail investor for treating the stock market like gambling, but I think it really does resemble gambling more than investing these days.<p>How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their market caps continue to climb?<p>“Value investing” is dead for most, picking a company that you believe will generate solid long-term revenue is no longer interesting. You need to figure out what is going to 10x tomorrow.<p>There are things that we could do to slow down the public equity markets and re-establish the relationship between stock price and business fundamentals, but that’s not what almost anyone wants.
I lost my life savings chasing the dopamine hit and can relate to this. I'm in my mid 30s and suffering from career burnout. I know I can't afford a home when I can barely work full-time so I figured I'd trade. I was up, and up and up!<p>Then I was down, then up, then down.<p>One morning I woke up and I was so down, I sold out of fear.<p>Now I'm left with so little I might as well be starting from scratch.<p>This feels like gambling and here I thought I was smarter than those people that lost in casinos.
At this point I’m just watching a slightly younger cohort of men repeat all of my worst digital addiction mistakes like getting inserted into the online video game -> toxic online behavior pipeline (or worse, fascism), ideologies (Musk), crypto and options gambling (thanks Reddit a la 2013 for all of the crypto communities and WSB) too much computer (ouch, my neck, arms and back.)<p>I’m not doing particularly well, especially mentally, despite having tons of opportunity and successes. Worried about the younger cohorts, but I guess that is a tale as old as time.
People want a chance to get rich. They also want excitement.<p>Doesn't that say more about our jobs that are
a) dead-end for most
b) financially limiting, with a salary that goes up slowly, if at all, unless you find a new job<p>People want the chance to win, and some meaning, and some daily purpose.<p>No one cares anymore about the stats of "stock pickers" "day traders" and other arguments for DCAing into index funds and not touching it until you're 65. A 60/40 portfolio. Don't time the market. Efficient market hypothesis. We live in a new world now, and people are willing to gamble. Sentiment is obvious for the average person to get a sense, and they trade on sentiment.<p>Maybe give people new meaning somehow, or a chance to make unscheduled money other than the slow-as-molasses salary increases.
Lot of people are becoming more knowledgable and skillful. But purpose is the missing ingredient.<p>Without purpose or a motivator in life people end up getting trapped in mindless rituals. It keeps the reward circuitry in the brain from decaying.
If you have the math chops, you should really try to get into it just so you can realize you are not going to make a money making algorithm. I got knee deep into it out of boredom during Covid and was able to have the "aha" moment where you realize the best you can do is buy index funds or just long hold companies you believe in that are in your area of expertise.
What’s old is new again.<p>If you worked in a tech office in the late 90’s, every other guy had Ameritrade or similar up in a window. It was the gaming/porn you could get away with at work.<p>Dot com roasted them all.
I wonder if this could, in a manner of speaking, be a "rational" choice that indicates a breakdown in society. That is to say, perhaps some of what we are seeing is that younger people have concluded that the only way to live a decent life in America is to become rich and becoming rich mostly comes down to luck. If gambling is the only way to get a decent life then they may as well gamble. If they lose, then they were already going to have a bad life anyways.
Some guy wrote a book recently and claimed that about 10% of workforce-eligible men are long term out of the workforce, due to some type of disability. Also 50% either aren't engaged at work or don't really do anything essential, meaning their job could disappear and it wouldn't be a huge impact.<p><a href="https://www.richmondfed.org/publications/research/econ_focus/2021/q1/district_digest" rel="nofollow">https://www.richmondfed.org/publications/research/econ_focus...</a><p><a href="https://www.frbsf.org/research-and-insights/publications/economic-letter/2023/10/mens-falling-labor-force-participation-across-generations/" rel="nofollow">https://www.frbsf.org/research-and-insights/publications/eco...</a>
The regular 9-to-5 is seen as a last resort now—it’s almost like you’ve failed if you don’t have a side hustle. That’s the vibe. With AI and machine learning platforms making waves, especially for traders, the game has completely changed. The barrier to entry? Practically gone. These platforms have made it so easy to get started that anyone with a bit of curiosity can jump in.<p>It’s not the exclusive playground of the Wall Street elite anymore. What used to be this tightly guarded world of algorithms and insider knowledge is now available to anyone willing to dive in. People are out here making bank, and they’re getting good at it. Trading isn’t just something “some people” do—it’s turning into a thriving industry where regular folks are learning the ropes and doing well for themselves.<p>This whole shift has made the traditional career path feel outdated. Why settle for clocking in and out when you can leverage tools and tech to build something for yourself? The idea of just sticking to the 9-to-5 feels like giving up when the opportunities to create and grow are right there, waiting.
The other day at the store, in my smaaaall hometown, I overheard the cashier and an older man discuss crypto while I was waiting for my turn. They were discussing meme-coins they gambled on. Super weird to hear irl.
Note this article isn't about investing, it's about gambling.<p>It doesn't mention Robinhood's role in promoting addictive gambling behaviors. How much has it changed since this 2020 article? <a href="https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html" rel="nofollow">https://www.nytimes.com/2020/07/08/technology/robinhood-risk...</a>
The supposed "survey" or whatever the hell this is was taken from a bunch of amateur people who started trading out of boredom which depicts an entirely non-real picture of the people who have been doing this for a living since quite some time. Like with everything else, using your brain cells can quickly make you realize it's a lot more than "gambling"
Coincidentially today I've just finished reading: "The Little Book on Common Sense Investing" by John Bogle. What's described in the article is exactly the opposite of what people should be doing if interested in serious investing. The book mostly focus on index funds and I highly recommend its reading to anyone who wants to understand and embark on investing seriously. The book is short, extremely easy to read, full of examples, wise advices and quotes from remarkable people of the investment sector.
After losing my first chunk of cash during 2000 .COM crash I became be quite contrarian. Thought real estate is way too high, thought the stock market is nuts, bitcoin is a scam. Turns out the big crash never happened and everything ket going up. Three years ago for some reason I jumped into the stock market, bought a house, bought some bitcoin. Turns out so far the gains have been life changing. If I ever get laid off,I may be able to just call it quits and retire.<p>I still think the whole thing doesn't make sense but it seems economic fundamentals don't work anymore. Everything is a bubble.
Gift link: <a href="https://www.wsj.com/finance/stocks/stock-market-trading-apps-addiction-afecb07a?st=TyEcMR" rel="nofollow">https://www.wsj.com/finance/stocks/stock-market-trading-apps...</a>
when you re generationally deprived of real estate heroin, you end up with stock market cocaine<p>it s all partly gambling but different strokes for different generations
The most difficult part about the stock market is that stocks don't move for the reasons people think.<p>People think fundamentals, news, financial performance, or chart patterns matter. But none of it does.<p>Markets are driven purely by supply and demand. And in this case, supply and demand for the stock itself.<p>Fundamentals are already priced in. Financial performance is already priced in. Expectations are priced in, and others probably have more information than you anyway. Other people also watch chart patterns and place their bets based on that.<p>What you're betting on is whether the market is right, or wrong. Or whether other investors will think the market is right or wrong.<p>Edit - the other part of it is that Wall Street firms hire tons of people who are incredibly smart, have math, economics and finance degrees or even PhDs, hire software engineers and spend hundreds of millions on infrastructure just to know the market better than you. You're not smarter than all those people put together.
I’m old enough to remember when you couldn’t just buy one share (you had to by a “lot” of 100), and when I actually received a paper stock certificate that I had to sign and mail to my broker. Rubes will try to beat the market and one in 1000 will succeed. Ignore them and follow the basics. I’ve been investing since the 80s and all my peers that did the boring thing are retiring comfortably.
I remember a controversial scamming figure in Italy that made millions by selling lucky numbers for lotteries or exploiting people's stupidity to part them with their life savings.<p>Her motto was "idiots _have_ to be scammed".<p>While this figure was morally and ethically deplorable, it always made me think how her motto essentially implied that there was an element of pure natural selection happening and she saw herself as the executor of the oldest survival of the fittest balancing act.<p>At the same time, as someone who follows places like WSB seeing people getting in life-ruining leverage just for the adrenaline of it, or even worse, just for internet karma always made me think of that scammer's words: this is just natural selection doing it's thing as it has been for billions of years. And there's no third party scamming them. They know what they risk, and will do it anyway.<p>The world is full of physical and non physical dangers, we are naturally programmed to push for self preservation and yet there are people that willingly and consciously decide to put it all on risk, how can it be anything but natural selection doing it's thing?
I make enough trading to live off of. Sure, I lost small amounts of money for about 15 years to get good enough at it to do well the last 4 years, but now I spend a lot of time looking at the market because it's basically my job. If I had a real job, I'd spend all my time peeking at the market, and probably make less money, lol.<p>I'd say it's a great job for generalist news junkies. Also, now with AI you can have it grind through hundreds of pages of stuff. It's like having your own hedge fund research department. Getting over the psychological difficulties to becoming a good trader and unlearning bad conventional thinking takes a while though. It's why good traders are such non-conformists. They have trained themselves to not trust crowds and instead determine the truth themselves in controversial matters and then ride the crowd as it slowly realizes things.
Lots of luck involved, even if someone think skill was involved. You will see many hedge fund have down years and go bankrupt, all of these hedge funds have “skill” like every one else
There’s something to be said about our economy that doesn’t seem to value hard work and long term planning anymore for the prospects of a middle class life. It’s not enough to study hard, work hard, climb the ranks of a company, etc. Those days are over. For most people, buying a house and raising a family (normal, healthy aspirations) are out of reach.<p>We live in a ruthlessly “meritocratic” society. Not that we have a meritocracy but we very much value the idea of merit earning wealth. But the corollary to saying that people with merit will do well is that people who aren’t doing well must not have merit. In other words they are useless.<p>For a person (especially young men) without the luck or credentials to be considered to have “merit” their only chance to make it is to bet it all on black. I would suggest that’s not a very healthy or sustainable way forward.
Gambling addiction is so unrelateable to me. Likely real drugs sure, obsessive gaming, done that too. I think I'm to anxious to enjoy gambling with like that or something.
At some point the US will have to come to terms that the insane libertarianism that it shows to individuals is not a recipe for them living a good or meaningful life. Modern life makes it extremely easy for men to ruin their lives, with gambling, drugs, alcohol, screen addiction etc. We know what a good life looks like, we lack the will of forcing people who make destructive decisions into living the good life. Until that is done, things will keep getting worse.
Most people have a gambler’s mindset about the stock market:<p>> […G]ambling in financial markets often goes undetected […] because individuals confuse their actions [i.e., speculating] with investing.<p>The typical person speculates on the market — buying low during their working years, and hopefully selling high during their retired years.
Even worse is the 'air drop' craze of the crypto world. I also think the people that invested (and lost) their money in HAWK coin knew what they were doing.<p>They wanted to pump and dump the coin and couldn't get out fast enough. It's just another way to gamble.
Dunning Kruger IMO makes it quite likely that any substantial investment be a bit more like gambling than it ideally should be, as the difference really only exists in the amount of knowledge one has in the industry one invests in.<p>On the other hand, most financial advice also states that one should not keep more than X months worth of expenses in cash, otherwise one is still losing money on inflation and the likes.<p>EDIT: Then again, if you are staring at the tickers all day, that might still be a problem.
It may turn out that in the “next epoch,” our stock market will be understood as our civilization's greatest work of art - our greatest cathedral to capitalism.
The real elephant in the room is sports betting. Sports has mainstream appeal and accessibility that stocks will never have (primarily white collar with good jobs).<p>Every libertarian theory about legalizing gambling has been wrong. Marketing and ease of access increase use. It’s making sports worse and hurting young men.
The problem is, they are "trading" from smartphone apps. Remember this - no money will ever inflow into your bank account from scrolling and tapping.
There's a paper I saw a while ago that uses LSTM for some kind of technical analysis trading, and the portfolio grew from 115k to 155k in a year, but also consistently<p>Seems like there's clear patterns to the market. If only these apps would teach people these patterns and trading techniques in depth rather than just letting them trade
This title is stupid. Comparisons to crack cocaine should have stopped in the 90's or early 00's at the latest. They're never made by people who have the slightest idea about what idea crack was, and whoever wrote that is extremely out of touch.<p>About crack: The public discourse was racist, the CIA had a lot to do with creating the problem, and in general it's no worse than the cocaine my fellow white people seem to think is so much cooler.