NYTimes article: Is it normalizing amateur trading?

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MrJones
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NYTimes article: Is it normalizing amateur trading?

Post by MrJones »

Article link
Alternate link to get past paywall, thanks to impatientInv

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
Last edited by MrJones on Fri May 20, 2022 1:53 pm, edited 1 time in total.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by samsoes »

MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
Paywall.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
A toxic article. Even a partial long-term speculator like me is working full-time doing something else. Why? Not because I lose money (I am profitable for sure), but because there is more to life than watching scribbles on the screen. I make more doing a full-time job, and I only spend maybe a couple of hours a week assessing all my holdings. I decided long ago that I would place a minimum of one year timeframe on any holding (except treasury bills or cash, of course).

This is a far cry from what they are tempting here. Do not read it.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by livesoft »

I didn't read the full article because it talks about the people who started trading in the past 2 years. And there is nothing new in all this. If you were around in 1998, then you know what I mean, but there have been many other years both before and after that tell the same story. Remember when Beardstown Ladies were doing their thing? What about the Nifty Fifty?

The more things change the more they stay the same.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by retired@50 »

MrJones wrote: Wed May 18, 2022 5:02 pm Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
To make it better...

Maybe Statistics 101 should become a required class in high school or college. Start a petition at the next PTA or school board meeting.

Based on the excerpts you provided, it sounds as if the trader is lucky as opposed to skillful. Of course, if one studies statistics they might understand this. The "arc of a softball" - really? :shock:

Regards,
Last edited by retired@50 on Wed May 18, 2022 7:42 pm, edited 1 time in total.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Little_Carmine »

Do you think the NYTimes is in the business of protecting its readers and educating them on the dangers of amateur trading? Or would the more accurate business model be to attract as many "clicks" and subscriptions as possible using the most provoking and catchy titles?

It's the same thing over at CNBC with the stock picking shows and 24hr coverage of the markets. Just a different medium than online articles.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by z3r0c00l »

I also got a bit red in the face while reading this article. In a world where the proper methods for investing are known, day trading should be treated more clearly like gambling. Would such an article be written about people playing scratch-off lotto games to make money? Also note the ubiquitous portfolio management assignment in business school, we had a basic version of that in HS. It was pure luck who won and lost, but the implication that was skill and stock picking could win the day. Yet as much as I didn't enjoy the article, I do more broadly enjoy separating the wheat from the chaff, a bear market will help with that.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Normchad »

It’s all trash.

But in the old days, people got their morning papers and there were certainly articles in there that could/would spur folks to action.

And magazines at all the supermarket checkouts with huge covers. The TEN best sticks to buy right now! And touting investors learning the Peter Lynch way.

And don’t forget all the TV ads. When EF Hutton talks, people listen.

So there has been this kind of trash my entire life. Maybe it seems different now with the way that we consume media; getting more and more of the same type of stuff that we like.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by impatientInv »

Alternate link
https://biz.crast.net/amateur-investors ... ear-looms/
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
No individual stocks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by dboeger1 »

z3r0c00l wrote: Wed May 18, 2022 7:52 pm In a world where the proper methods for investing are known, day trading should be treated more clearly like gambling.
Hey, you take that back! Gambling is better than that! Casinos have lights and sounds and buffets to fatten us up for the slaughter! They're so much more fun!

As for OP's question, I don't know about NYT specifically, but I do remember when I was growing up in school, I had a friend whose parents were quite different from each other and eventually ended up getting a pretty nasty divorce. It's unfortunate because they were both really nice people, they just couldn't have been more different in personality and priorities. The mother was very career-motivated, made good money, worked long hours, climbed the corporate ladder, was very generous hosting their son's friends, always served delicious food, etc. She was kind of the stereotypical model mother who wanted to have it all. The father, on the other hand, was suuuuper laid back, worked part-time in IT on a contract basis whenever he felt like it, enjoyed going out to eat, partying, flirting with other women (although she was the one who ended up cheating and telling him to kind of push him into accepting divorce, but that's beside the point), etc. He could often be found out smoking or down in the basement watching movies or playing pool. He was basically leanFIRE before people called it that. To be fair, I don't think he actually spent that much money or burdened his family in any significant way (not that I would've been privy to that information), he just didn't want to work any more than he had to. Come to think of it, the mother was FIRE before it was called that, because I remember my friend casually mentioning at one point that they had about a $1m net worth.

The reason I bring it up is that the father was a religious viewer of Jim Cramer's Mad Money, and he would day-trade on the side for some additional income because he thought it was more fun than taking on more IT work. He would ask us kids to tell him about cool trends and things we were interested in so he could invest in the next big. I never actually put 2 and 2 together until just now, but the parents got divorced around 2008 if I remember correctly, so there's a decent chance he blew a bunch of money when the market collapsed and that was the straw that broke the mother camel's back. I never asked them about it and didn't know anything about the father's stock picks, so I admit that my recollection of this is from a very limited perspective of the whole situation, but it's interesting to me that I know of at least one family that bought into and possibly fell apart due to day-trading based on naive stock TV stock picks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by vxdx »

The whole point of the article is that the market dropping has made these folks less successful or give up. It’s reporting peoples experience. Im not sure what would make you think it’s promoting day trading. If anything it’s pointing out that these folks who previously found it easy are having a tougher time.

If you want to point to problematic info, there’s myriad other examples to choose, from MotleyFool to Jim Cramer, not to mention YouTube and TikTok.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Fallible »

I've been wondering how these millions of pandemic-spurred amateur investors were doing in this market crash and the NYT article is about that. So some did well, some didn't, some changed tactics, some are getting out, and it's interesting to hear from them directly.

I hope to learn more about this trading when I read Spencer Jakab's new book, The Revolution That Wasn't: Gamestop, Reddit, and the Fleecing of Small Investors. Jakab, a WSJ columnist, also appeared on Rick Ferri's podcast in January. I think the book also is among Taylor Larimore's "Gems."
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Re: NYTimes article: Is it normalizing amateur trading?

Post by z3r0c00l »

vxdx wrote: Wed May 18, 2022 8:18 pm The whole point of the article is that the market dropping has made these folks less successful or give up. It’s reporting peoples experience. Im not sure what would make you think it’s promoting day trading. If anything it’s pointing out that these folks who previously found it easy are having a tougher time.

If you want to point to problematic info, there’s myriad other examples to choose, from MotleyFool to Jim Cramer, not to mention YouTube and TikTok.
Neutral reporting of dangerous behavior without more clearly explaining why it is dangerous, and what the safe alternative is, is irresponsible. A few quotes on investing through mutual funds would have covered it.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by runninginvestor »

Normchad wrote: Wed May 18, 2022 7:53 pm It’s all trash.

But in the old days,
people got their morning papers and there were certainly articles in there that could/would spur folks to action.

And magazines at all the supermarket checkouts with huge covers. The TEN best sticks to buy right now! And touting investors learning the Peter Lynch way.

And don’t forget all the TV ads. When EF Hutton talks, people listen.

So there has been this kind of trash my entire life. Maybe it seems different now with the way that we consume media; getting more and more of the same type of stuff that we like.
Sticks, eh? How old are you?!? (Just kidding, made me chuckle reading that)
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Re: NYTimes article: Is it normalizing amateur trading?

Post by muffins14 »

I didn’t think it was irresponsible, or normalizing as they did cover how some of them “got burned” or went to cash etc. it’s a news article not an educational essay.

I think it was incredible though that people think they can watch CNBC for a few hours and “do stuff with volume” or that the only alternatives are “do day trading with a lot of time” vs “don’t have time, must sit in cash”

The state of financial education is pretty poor, and Americans in general are infatuated with get-rich-quick schemes in all of their formats

The industry and culture are to blame here, not the news
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Re: NYTimes article: Is it normalizing amateur trading?

Post by PFOS »

I don't think a news article from NYT is anything compared to huge number of investing related YouTube, Instagram, and TikTok videos I see all over the internet. But are these articles and videos and really that different from this forum? Aren't we all just taking advice or information from some unknown people from the internet?
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Nowizard »

This is interesting in terms of our family. We have two boys, both well into adulthood, who have been exposed to investing since childhood, doing well for a number of years. However, they both engage in regular buy/sell with what they consider small amounts, often with things I have never heard of or know about such as crypto. They have never seen a recession, use Robinhood, even have very small amounts of a couple hundred dollars on the gambling sites advertising so frequently on television. Many changes as time moves on, some positive, some with a risk of loss, gain or even disaster in multiple areas of life, including investing.

Tim
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Fallible »

Nowizard wrote: Thu May 19, 2022 8:02 am This is interesting in terms of our family. We have two boys, both well into adulthood, who have been exposed to investing since childhood, doing well for a number of years. However, they both engage in regular buy/sell with what they consider small amounts, often with things I have never heard of or know about such as crypto. They have never seen a recession, use Robinhood, even have very small amounts of a couple hundred dollars on the gambling sites advertising so frequently on television. Many changes as time moves on, some positive, some with a risk of loss, gain or even disaster in multiple areas of life, including investing.

Tim
You may be interested in a book I've just begun reading and mentioned earlier here by WSJ columnist Spencer Jakab that begins with the trading activity of his sons and how he "woefully underestimated modern social media and the power of the latest smartphone-based, commission-free trading apps." The book is The Revolution That Wasn't: Gamestop, Reddit, and the Fleecing of Small Investors.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by finite_difference »

z3r0c00l wrote: Thu May 19, 2022 7:23 am
vxdx wrote: Wed May 18, 2022 8:18 pm The whole point of the article is that the market dropping has made these folks less successful or give up. It’s reporting peoples experience. Im not sure what would make you think it’s promoting day trading. If anything it’s pointing out that these folks who previously found it easy are having a tougher time.

If you want to point to problematic info, there’s myriad other examples to choose, from MotleyFool to Jim Cramer, not to mention YouTube and TikTok.
Neutral reporting of dangerous behavior without more clearly explaining why it is dangerous, and what the safe alternative is, is irresponsible. A few quotes on investing through mutual funds would have covered it.
I agree. Even the links at the bottom didn’t have one that directly links to how you are supposed to invest in your 401k following the buy and hold low-cost index fund approach. I think that should be reported to the paper.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by investorpeter »

There was a time when one could point to an article in the New York Times as an indication of some interesting new development in a societal trend. But somewhere along the NYT's transition to becoming a subscription-based service, it seems to increasingly publish articles about topics that are simply intended to engage (and enrage) its subscribers, instead of reporting on actual news - stories for the sake of stories that reflect little of what is actually happening in the real world. The pageantry is still there, with full page photographs, bold, large font headlines, long feature pieces that interview dozens of people, but the topics are always the same. Maybe I'm old fashioned, but I think the news should publish actual news. Maybe we should start calling them "olds" since they always publish the same old topics.

I say all of this to note that this article doesn't bring up anything new. This is just a rehash of the "dangers of retail trading" theme that has been running in various media outlets for the past 5 years.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by arcticpineapplecorp. »

MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
then stop reading them.

i tend to read articles like this one instead:

How A Rookie Day Trader Ended Up Losing $127,000

and watch videos like this:

I'm in debt up to my eyeballs

and read newsletter's like this:
don't you remember it wasn't long ago that investors bought Zoom technologies rather than Zoom Video :oops: :

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Re: NYTimes article: Is it normalizing amateur trading?

Post by Californiastate »

This is nothing new. Technical stock trading applications have been around for quite some time. I subscribed to Value Line back in the '80s. People will always look for an easier way to win.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by typical.investor »

MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
If the article does that, so what? How much impact will there be?

How about stock trading games in middle/high school? They are exciting and part of your education so must be what's right - no? Or at least the story goes. That to me is a bigger concern...

If people are adults and make bad decisions on crypto, options, meme-stocks, NFTs etc., who am I so tell them how to live their life.

Anyway, there is a 501(c)3 dedicated to it. I am not sure if indexing is an option in the game or not but someone should contact them and find out. https://www.stockmarketgame.org/

It looks like the game let's you short and use leverage... https://apps.apple.com/us/app/stock-mar ... 78174?ls=1

That 501 targets G4 and up. What are your kids learning?
Last edited by typical.investor on Thu May 19, 2022 2:40 pm, edited 1 time in total.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

dboeger1 wrote: Wed May 18, 2022 8:13 pm
z3r0c00l wrote: Wed May 18, 2022 7:52 pm In a world where the proper methods for investing are known, day trading should be treated more clearly like gambling.
Hey, you take that back! Gambling is better than that! Casinos have lights and sounds and buffets to fatten us up for the slaughter! They're so much more fun!
If it were not for the lights, sounds, objectionable extras, and overall questionable atmosphere, I would gladly take the buffet and move on; who need to gamble to have "fun", right? :P

That aside, I think day trading is close to gambling. Given all the in-betweens that make money, it is very hard to really justify the activity as being better than gambling. Also, they are really not taking risks for the benefit of another investor/speculator; so it serves no real purpose in risk management. Gambling provides no benefits to either side and a financial risk is merely created. Fundamentally, it is a different prospect than insurance, which is not gambling.

Speculators of another kind (the insurer), despite how some here argue otherwise, are not gambling. These risk premium seekers obtain their money by taking another investor's risk; whether it will pay off, that is speculative. They may not even be interested in the underlying asset but interested in that premium; nevertheless, it does give compensation to the hedger that their risk has been removed for a price. That has meaning and purpose; and some do this as a source of profits, like insurance companies. Do we accuse them of gambling? No; since they are taking the other parties risk from them, this has a meaningful purpose in the realm of risk management and is not solely money grabbing. Why are option market insurers any different? Granted, maybe the option buyer and/or option writter is just increasing risk by buying/selling the contract just to make money on pricing movements rather than for the risk management aspect they provide; but like how day traders are not concerned about real economical benefits while the investors and some speculators are, we cannot dismiss it as gambling just because options get abused by some. Maybe the insurer will never have their contract be accepted by someone who actually needs the risk to be hedged and merely gets tossed around by traders in hopes of quick profits, but we cannot blame the insurer for this.

The hedger is on at least one side of the contract and merely is taking the risks they can afford and remove those risks they cannot afford; whether this ends up being a profitable result to do is speculative, but the hedger is more concerned about making money from the risks they are taking rather than those risks they are giving up which may have a possible premium. In some cases, like covered calls, both sides could be hedging risk at the same time (sharing risk rather than merely one side giving it away to the other).

Maybe this is long-winded, but the point here is that day trading is so close to gambling because there is no insurance provided nor any other really meaningful benefits to the other side of the trade.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by typical.investor »

secondopinion wrote: Thu May 19, 2022 2:36 pm
dboeger1 wrote: Wed May 18, 2022 8:13 pm
z3r0c00l wrote: Wed May 18, 2022 7:52 pm In a world where the proper methods for investing are known, day trading should be treated more clearly like gambling.
Hey, you take that back! Gambling is better than that! Casinos have lights and sounds and buffets to fatten us up for the slaughter! They're so much more fun!
If it were not for the lights, sounds, objectionable extras, and overall questionable atmosphere, I would gladly take the buffet and move on; who need to gamble to have "fun", right? :P
Well gambling works because of near misses. You get a charge when you win and you get a charge when you get close. So even if you don't win that much, the moments building up to the point where you lose but looks like you might have a chance are what keeps playing.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

typical.investor wrote: Thu May 19, 2022 2:33 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
If the article does that, so what? How much impact will there be?

How about stock trading games in middle/high school? They are exciting and part of your education so must be what's right - no? Or at least the story goes.
I had such a game as part of an economics course in college. The rationale of the stocks picked was graded, the summary of the results was graded, and the lessoned learned was graded. The actual results were extra credit. Sadly, Fall 2008 was not generous for extra credit. Even with the S&P 500 as the metric, not that many made it. I was one of those who succeeded, being partly due to my portfolio being fairly defensive in the stocks selected; and one of the only students who did a low risk metric-based approach. My portfolio, had it continued even until now, would be still have been better with risk-adjusted returns than the S&P 500 (but it lagged the market due to the risk not taken). Sadly, the money was not real.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by homebuyer6426 »

Perhaps this is exactly their intention. The more uninformed, novice money there is in the market, the more for the taking.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

typical.investor wrote: Thu May 19, 2022 2:43 pm
secondopinion wrote: Thu May 19, 2022 2:36 pm
dboeger1 wrote: Wed May 18, 2022 8:13 pm
z3r0c00l wrote: Wed May 18, 2022 7:52 pm In a world where the proper methods for investing are known, day trading should be treated more clearly like gambling.
Hey, you take that back! Gambling is better than that! Casinos have lights and sounds and buffets to fatten us up for the slaughter! They're so much more fun!
If it were not for the lights, sounds, objectionable extras, and overall questionable atmosphere, I would gladly take the buffet and move on; who need to gamble to have "fun", right? :P
Well gambling works because of near misses. You get a charge when you win and you get a charge when you get close. So even if you don't win that much, the moments building up to the point where you lose but looks like you might have a chance are what keeps playing.
It is irrational behavior. I was only in a casino once and I was a kid at the time (the casino broke rules by having me go through the area to the buffet); being the person I was, I asked the players about how much money they were losing, if their money was from their social security check, and stuff like that. The operators quickly noticed and got me into the buffet area. Afterwards, they had me go in the back way to avoid the mishap again.

Nowadays, I doubt they would let me in anyway because I cannot be conned, I do card count, I am sober, and I know probabilities fairly well.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by typical.investor »

secondopinion wrote: Thu May 19, 2022 2:48 pm
typical.investor wrote: Thu May 19, 2022 2:33 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
If the article does that, so what? How much impact will there be?

How about stock trading games in middle/high school? They are exciting and part of your education so must be what's right - no? Or at least the story goes.
I had such a game as part of an economics course in college. The rationale of the stocks picked was graded, the summary of the results was graded, and the lessoned learned was graded. The actual results were extra credit. Sadly, Fall 2008 was not generous for extra credit. Even with the S&P 500 as the metric, not that many made it. I was one of those who succeeded, being partly due to my portfolio being fairly defensive in the stocks selected; and one of the only students who did a low risk metric-based approach. My portfolio, had it continued even until now, would be still have been better with risk-adjusted returns than the S&P 500 (but it lagged the market due to the risk not taken). Sadly, the money was not real.
College - yeah great idea. Sounds like a great course. It's fantastic they used the S&P 500 as the metric. Was there any info presented on the track records of active investors (i.e. managers or past students) compared to it.

Anyway, my favorite equities analyst always says two analysts can look at exactly the same data and derive entirely different rationales for recommending/ not recommending a stock over another. In the end, I suspect there isn't much correlation between the rationale and actual performance. If there were, we could expect active managers to outperform over time.

So great course and everything but I don't think it is teaching what is in the best interest of investors to learn.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by arcticpineapplecorp. »

secondopinion wrote: Thu May 19, 2022 2:48 pm
typical.investor wrote: Thu May 19, 2022 2:33 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
If the article does that, so what? How much impact will there be?

How about stock trading games in middle/high school? They are exciting and part of your education so must be what's right - no? Or at least the story goes.
I had such a game as part of an economics course in college. The rationale of the stocks picked was graded, the summary of the results was graded, and the lessoned learned was graded. The actual results were extra credit. Sadly, Fall 2008 was not generous for extra credit. Even with the S&P 500 as the metric, not that many made it. I was one of those who succeeded, being partly due to my portfolio being fairly defensive in the stocks selected; and one of the only students who did a low risk metric-based approach. My portfolio, had it continued even until now, would be still have been better with risk-adjusted returns than the S&P 500 (but it lagged the market due to the risk not taken). Sadly, the money was not real.
we played the stock market game in high school and i learned nothing other than stocks go up and down. we didn't even pick a particular stock, we just read the newspaper and looked at stocks that went up or down by 1/8ths or 2/8ths or whatever.

I wish we had Prudential's Outsmart The Market Game at the time. Would have learned the only way to win is not to play.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

typical.investor wrote: Thu May 19, 2022 3:02 pm
secondopinion wrote: Thu May 19, 2022 2:48 pm
typical.investor wrote: Thu May 19, 2022 2:33 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
If the article does that, so what? How much impact will there be?

How about stock trading games in middle/high school? They are exciting and part of your education so must be what's right - no? Or at least the story goes.
I had such a game as part of an economics course in college. The rationale of the stocks picked was graded, the summary of the results was graded, and the lessoned learned was graded. The actual results were extra credit. Sadly, Fall 2008 was not generous for extra credit. Even with the S&P 500 as the metric, not that many made it. I was one of those who succeeded, being partly due to my portfolio being fairly defensive in the stocks selected; and one of the only students who did a low risk metric-based approach. My portfolio, had it continued even until now, would be still have been better with risk-adjusted returns than the S&P 500 (but it lagged the market due to the risk not taken). Sadly, the money was not real.
College - yeah great idea. Sounds like a great course. It's fantastic they used the S&P 500 as the metric. Was there any info presented on the track records of active investors (i.e. managers or past students) compared to it.

Anyway, my favorite equities analyst always says two analysts can look at exactly the same data and derive entirely different rationales for recommending/ not recommending a stock over another. In the end, I suspect there isn't much correlation between the rationale and actual performance. If there were, we could expect active managers to outperform over time.

So great course and everything but I don't think it is teaching what is in the best interest of investors to learn.
All the current students, by name, had their portfolios and results available at all times. If I remember right, out of about 60 or so from Sep 2008 through Nov 2008, here are the results I remember: only a 1/4 to a 1/3 beat the market, at least 1/4 lost more than 60%, one went broke, and only one student (who did not cheat with shorting stocks) made money. Most of the portfolios were high beta, single stock, or otherwise reckless to some degree. I was probably one of the more sensible there since I did not aim major profits and I diversified in stable large-cap low-volatility companies. And no, one could not hold funds or ETFs.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Candor »

Many a BH was enticed by the allure of quick money at the start of their investing career and that led them here. Day trading was an excellent education for me at a young age and at a relatively low cost (although it seemed very expensive at the time). Where would I be today without the invaluable education the likes of JDSU and CSCO provided for me? I also would be remiss without an honourable mention of Janus Funds. A real pedigree education if I say so myself. :D
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
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Re: NYTimes article: Is it normalizing amateur trading?

Post by health teacher »

retired@50 wrote: Wed May 18, 2022 7:38 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
To make it better...

Maybe Statistics 101 should become a required class in high school or college. Start a petition at the next PTA or school board meeting.

Based on the excerpts you provided, it sounds as if the trader is lucky as opposed to skillful. Of course, if one studies statistics they might understand this. The "arc of a softball" - really? :shock:

Regards,
It's a great idea, but it doesn't really work in practice at the high school level, at least not with the traditional behaviorist approach in education. Statistics are not relevant to teenagers, much like personal finance, so they won't retain anything and it will have a minimal impact on their future decisions.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

arcticpineapplecorp. wrote: Thu May 19, 2022 3:07 pm
secondopinion wrote: Thu May 19, 2022 2:48 pm
typical.investor wrote: Thu May 19, 2022 2:33 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.
If the article does that, so what? How much impact will there be?

How about stock trading games in middle/high school? They are exciting and part of your education so must be what's right - no? Or at least the story goes.
I had such a game as part of an economics course in college. The rationale of the stocks picked was graded, the summary of the results was graded, and the lessoned learned was graded. The actual results were extra credit. Sadly, Fall 2008 was not generous for extra credit. Even with the S&P 500 as the metric, not that many made it. I was one of those who succeeded, being partly due to my portfolio being fairly defensive in the stocks selected; and one of the only students who did a low risk metric-based approach. My portfolio, had it continued even until now, would be still have been better with risk-adjusted returns than the S&P 500 (but it lagged the market due to the risk not taken). Sadly, the money was not real.
we played the stock market game in high school and i learned nothing other than stocks go up and down. we didn't even pick a particular stock, we just read the newspaper and looked at stocks that went up or down by 1/8ths or 2/8ths or whatever.

I wish we had Prudential's Outsmart The Market Game at the time. Would have learned the only way to win is not to play.
Talk about a useless activity. What good is throwing darts at a dart board as it were? At least I spend time to research.

At least I think most of the class got the picture during 2008 that they can lose a lot of money. The professor gave me extra credit for not only the results but also the effort I had done to make my portfolio (like I actually spent days strategizing my approach and combing through stocks prior to the buy date and it showed in my work). I was not yet an adult at the time I took the class and I definitely did not have the money to invest at that time, but investing caught my eye since I was a kid. I knew nothing about Wall Street "gurus"; I still do not overly care about Wall Street gurus. I just knew that one can make money on money by lending to people or buying some of a business. I learned about investing when I asked my parents about how I could earn more money than what was given from my CD (I was about 10 or so); they gave me the simple answer of what stocks and bonds were and how their risk compared. I learned about insurance slightly later and added a third pillar of possible sources profits that I was interested in (albeit I did not know how one could do that at the time). Trading was seen last, and I was never interested because it never had any real purpose economically.

Odd that I had a strong interest in investing.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Normchad »

Candor wrote: Thu May 19, 2022 3:25 pm Many a BH was enticed by the allure of quick money at the start of their investing career and that led them here. Day trading was an excellent education for me at a young age and at a relatively low cost (although it seemed very expensive at the time). Where would I be today without the invaluable education the likes of JDSU and CSCO provided for me? I also would be remiss without an honourable mention of Janus Funds. A real pedigree education if I say so myself. :D
+1.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Monsterflockster »

MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
Pretty sure the stock market doesn't follow the laws of physics.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

Candor wrote: Thu May 19, 2022 3:25 pm Many a BH was enticed by the allure of quick money at the start of their investing career and that led them here. Day trading was an excellent education for me at a young age and at a relatively low cost (although it seemed very expensive at the time). Where would I be today without the invaluable education the likes of JDSU and CSCO provided for me? I also would be remiss without an honourable mention of Janus Funds. A real pedigree education if I say so myself. :D
I never found I got allured by get rich quick schemes. Being a partial speculator, this probably does not make sense to some here; but my definition of a speculator is wider than usual. I found this board by chance; seeing that we agreed that costs are a big deal, I stayed put.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

Monsterflockster wrote: Thu May 19, 2022 4:53 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
Pretty sure the stock market doesn't follow the laws of physics.
I guess there is such a topic: https://en.wikipedia.org/wiki/Physics_o ... al_markets
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by 9-5 Suited »

I have stopped worrying about the crusade aspect of passive investing / low cost indexing. It’s a bit like religion - if someone asks me my opinion I will give it, but I don’t really care what someone else believes or try to convince them they’re wrong unless they really care to discuss it. Let the NYT or CNBC or whoever say whatever they want, and let these day traders figure it out for themselves.

Someone who is a day trader that believe they’ve figured out some secret sauce to investing is only going to stop when their account is ruined or they stumble onto an epiphany through reading enough content they find convincing.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by retired@50 »

health teacher wrote: Thu May 19, 2022 3:38 pm
retired@50 wrote: Wed May 18, 2022 7:38 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
To make it better...

Maybe Statistics 101 should become a required class in high school or college. Start a petition at the next PTA or school board meeting.

Based on the excerpts you provided, it sounds as if the trader is lucky as opposed to skillful. Of course, if one studies statistics they might understand this. The "arc of a softball" - really? :shock:

Regards,
It's a great idea, but it doesn't really work in practice at the high school level, at least not with the traditional behaviorist approach in education. Statistics are not relevant to teenagers, much like personal finance, so they won't retain anything and it will have a minimal impact on their future decisions.
I'm not sure what the "behaviorist approach" is, but I hope it doesn't involve students playing stock-picking games as a method of teaching about personal finance.

See link to Jason Zweig article "Stock Market 101: Teaching the wrong lessons"
https://jasonzweig.com/stock-market-101 ... g-lessons/

From the article:
Jason Zweig wrote: Before you conclude that this game has fostered a bunch of budding Warren Buffetts, you need to understand what many of these young portfolio managers were trying to do: to beat the market over a 14-week period by taking as much risk as possible.
...
This year, 4,400 teams of students from high schools and junior high schools around the U.S. competed to earn the highest return on an initial $100,000 of hypothetical money. The top 10 teams get an all-expenses-paid trip to Washington, usually including a private meeting with their members of Congress.
...
“Wild-eyed, gold-rush, Klondike speculation, that’s what wins the Stock Market Game,” says Mr. Shaffer, who has three teams in the preliminary top 10. His hottest team, in first place as of May 6, is up 84.3%.
...
If your own children are studying the stock market in school, you had better ask them what they have been learning. They might need to be deprogrammed.
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

health teacher wrote: Thu May 19, 2022 3:38 pm
retired@50 wrote: Wed May 18, 2022 7:38 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
To make it better...

Maybe Statistics 101 should become a required class in high school or college. Start a petition at the next PTA or school board meeting.

Based on the excerpts you provided, it sounds as if the trader is lucky as opposed to skillful. Of course, if one studies statistics they might understand this. The "arc of a softball" - really? :shock:

Regards,
It's a great idea, but it doesn't really work in practice at the high school level, at least not with the traditional behaviorist approach in education. Statistics are not relevant to teenagers, much like personal finance, so they won't retain anything and it will have a minimal impact on their future decisions.
I learned both as a teenager before college and they are very relevant to me (then and now), and they have a major impact on my decisions. Am I an anomaly, or are we thinking teenagers are generally not capable when they are? However, I learned college-level statistics by my own study and learned personal finance from my parents; so, maybe I am a bit of an anomaly?
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by arcticpineapplecorp. »

secondopinion wrote: Thu May 19, 2022 4:59 pm
Monsterflockster wrote: Thu May 19, 2022 4:53 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Article link

My problem with these types of articles is they normalize stock trading by amateurs; they normalize the notion that anyone can sit in their bedroom, give up their job, and make money for free.

Examples from the article:
Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig.
She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.
Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
Pretty sure the stock market doesn't follow the laws of physics.
I guess there is such a topic: https://en.wikipedia.org/wiki/Physics_o ... al_markets
i haven't seen this video yet, but someone at bogleheads posted this a few years ago:

The Physics of Wall Street: Weatherall Public Lecture
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Re: NYTimes article: Is it normalizing amateur trading?

Post by muffins14 »

investorpeter wrote: Thu May 19, 2022 1:25 pm There was a time when one could point to an article in the New York Times as an indication of some interesting new development in a societal trend. But somewhere along the NYT's transition to becoming a subscription-based service, it seems to increasingly publish articles about topics that are simply intended to engage (and enrage) its subscribers, instead of reporting on actual news - stories for the sake of stories that reflect little of what is actually happening in the real world. The pageantry is still there, with full page photographs, bold, large font headlines, long feature pieces that interview dozens of people, but the topics are always the same. Maybe I'm old fashioned, but I think the news should publish actual news. Maybe we should start calling them "olds" since they always publish the same old topics.
? There is still news, and plenty of it. There are multiple sections now - news, editorial, cooking, product reviews. There is just more, and apparently some sections you consider to be fluff, which is fine, but don’t pretend the news is missing
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Re: NYTimes article: Is it normalizing amateur trading?

Post by chris319 »

The NYT article is fairly benign. Peter Lynch and the Beardstown Ladies (until they were exposed) did an awful lot to "normalize" trading by amateurs. They made it seem facile to beat the market by picking individual stocks. Warren Buffett has said it was easier to pick winners in the 1950's when he and Charlie were getting started. Those days are gone.

If a day trader discovers the secret sauce that guarantees them profits year after year, in bull market and bear, then bravo for them. The masses who think it's easy money after a few successful trades in their Robinhood accounts in 2020 or 2021 may some day be in for a rude awakening.
Financial decisions based on emotion often turn out to be bad decisions.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Harmanic »

dboeger1 wrote: Wed May 18, 2022 8:13 pm
z3r0c00l wrote: Wed May 18, 2022 7:52 pm In a world where the proper methods for investing are known, day trading should be treated more clearly like gambling.

The reason I bring it up is that the father was a religious viewer of Jim Cramer's Mad Money,
To be fair, "Mad Money" by definition is money you can play with, money that you are willing to lose. So anyone who bets their life savings on tips from "Mad Money" doesn't understand that it is a show about gambling for gamblers. If you want to gamble, fine, but it should be for entertainment.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by FrugalInvestor »

retired@50 wrote: Wed May 18, 2022 7:38 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
To make it better...

Maybe Statistics 101 should become a required class in high school or college. Start a petition at the next PTA or school board meeting.

Based on the excerpts you provided, it sounds as if the trader is lucky as opposed to skillful. Of course, if one studies statistics they might understand this. The "arc of a softball" - really? :shock:

Regards,
Or maybe we can make sure our kids become more financially savvy with courses containing this sort of educational games (he says tongue in cheek).......

https://insurancenewsnet.com/innarticle ... -investing

From article.....
And now, teachers can use an online stock market game to educate the youth on how to start investing in one of the best income-producing assets and prepare them to build a solid financial foundation.
Have a plan, stay the course and simplify. Then ignore the noise!
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Re: NYTimes article: Is it normalizing amateur trading?

Post by retired@50 »

FrugalInvestor wrote: Thu May 19, 2022 10:08 pm Or maybe we can make sure our kids become more financially savvy with courses containing this sort of educational games (he says tongue in cheek).......
Does this mean you saw my other post - which is generally critical of stock market games... It seems they teach short term speculation, instead of sound long term investment principles.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Re: NYTimes article: Is it normalizing amateur trading?

Post by FrugalInvestor »

retired@50 wrote: Thu May 19, 2022 11:05 pm
FrugalInvestor wrote: Thu May 19, 2022 10:08 pm Or maybe we can make sure our kids become more financially savvy with courses containing this sort of educational games (he says tongue in cheek).......
Does this mean you saw my other post - which is generally critical of stock market games... It seems they teach short term speculation, instead of sound long term investment principles.

Regards,
No, I'm sorry, I didn't read through all the previous posts so missed yours. But I agree with you wholeheartedly that this is the wrong way to expose our kids to stock market "investing".
Have a plan, stay the course and simplify. Then ignore the noise!
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Re: NYTimes article: Is it normalizing amateur trading?

Post by secondopinion »

retired@50 wrote: Thu May 19, 2022 11:05 pm
FrugalInvestor wrote: Thu May 19, 2022 10:08 pm Or maybe we can make sure our kids become more financially savvy with courses containing this sort of educational games (he says tongue in cheek).......
Does this mean you saw my other post - which is generally critical of stock market games... It seems they teach short term speculation, instead of sound long term investment principles.

Regards,
I agree that students would get it wrong with these; however, I learned how to do long-term active investing from such a module. I guess that is what happens when one trains to be more like a responsible stock fund manager rather than a position trader. It is certainly more of a miss in teaching passive investing. At least I care for the virtual money like it were someone else’s; I cannot stand the thought of being irresponsible and having to justify why I did a bad job.

I cannot say it is pointless, but I think financial maturity is needed. I was not an adult at the time of taking the college course, but sadly I was the odd one out who actually took days to be like a fund manager for the course .
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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Re: NYTimes article: Is it normalizing amateur trading?

Post by Fallible »

retired@50 wrote: Thu May 19, 2022 5:49 pm
health teacher wrote: Thu May 19, 2022 3:38 pm
retired@50 wrote: Wed May 18, 2022 7:38 pm
MrJones wrote: Wed May 18, 2022 5:02 pm Are these types of articles doing a disservice, and causing more folks who can't afford it, to lose their money? What can we do as a community or as individiuals, in small or big ways, to make this situation better?
To make it better...

Maybe Statistics 101 should become a required class in high school or college. Start a petition at the next PTA or school board meeting.

Based on the excerpts you provided, it sounds as if the trader is lucky as opposed to skillful. Of course, if one studies statistics they might understand this. The "arc of a softball" - really? :shock:

Regards,
It's a great idea, but it doesn't really work in practice at the high school level, at least not with the traditional behaviorist approach in education. Statistics are not relevant to teenagers, much like personal finance, so they won't retain anything and it will have a minimal impact on their future decisions.
I'm not sure what the "behaviorist approach" is, but I hope it doesn't involve students playing stock-picking games as a method of teaching about personal finance.

See link to Jason Zweig article "Stock Market 101: Teaching the wrong lessons"
https://jasonzweig.com/stock-market-101 ... g-lessons/

From the article:
Jason Zweig wrote: Before you conclude that this game has fostered a bunch of budding Warren Buffetts, you need to understand what many of these young portfolio managers were trying to do: to beat the market over a 14-week period by taking as much risk as possible.
...
This year, 4,400 teams of students from high schools and junior high schools around the U.S. competed to earn the highest return on an initial $100,000 of hypothetical money. The top 10 teams get an all-expenses-paid trip to Washington, usually including a private meeting with their members of Congress.
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“Wild-eyed, gold-rush, Klondike speculation, that’s what wins the Stock Market Game,” says Mr. Shaffer, who has three teams in the preliminary top 10. His hottest team, in first place as of May 6, is up 84.3%.
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If your own children are studying the stock market in school, you had better ask them what they have been learning. They might need to be deprogrammed.
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Here's Jason Zweig's WSJ column last month on "What Teenagers Really Learn From Stock Market Games."

https://www.wsj.com/articles/what-teena ... 1648220833
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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