It's hard for most folks to understand this message. His message is right about outcomes, probability of success and investing. but most people don't have the time, patience and perseverance to do it.
Best quote I’ve heard about investment came from a financial professional at MIT: “The great advantage about investing in stocks is that the most you could possibly lose is everything.” Love it
Instead of "Should I take risks in investing?" maybe it should be "Can I find the right amount of risk that suits my financial situation and psychological comfort?" You can choose your amount of risk by the investments you make.
The lack of new entrepreneurs isn't due to fear of risk taking. Look at sports betting - it's popularity has never been higher & it is being legalized in more states because people are seeking it out in states other than their home state. There are fewer entrepreneurs because everything is overregulated to the point that local & federal governments have made it impossible or too complicated to do anything. This has been accomplished by wealthy individuals & corporations lobbying government for more regulation to gatekeep their industries. & Sh*+ , just the insurance requirements for starting any sort of endeavor immediately puts a new business's overhead at a level requiring crazy investment just to start a lemonade stand.
Passive investing is superior, not because of risk aversion, but because you don't waste all your gains on trading costs and short term capital gains taxes.
Antonio Esquivel It depends what tax bracket you are in, But it's irrelevant. The question is whether active or passive investment strategies are more profitable, not whether one should invest vs. just get a job.
Short term capital gains taxes? Don't have those in my country. Trading costs? We get to reduce trading costs from capital gains taxes. I could actually earn money by simply spending enough money in trading costs with the goal of ending up exactly at +0% gain when the tax year ends because that's not all there is to it either. We do have other stupid things to make up for it that the US doesn't, though. Like no DRIP investing or extra taxation on dividends from ETFs. Also, The Intelligent Investor was written almost 70 years ago, I'm not saying it doesn't have some good wisdom in it, just saying it's outdated as hell seeing as how they didn't even have proper computers, online brokers, high-frequency trading, trading computer algorithms etc. It also doesn't take into account how ridiculously rich a small percentage of the population has gotten and how they just keep getting richer and richer while the rest of us keep getting poorer and poorer, relatively speaking at least.
I disagree. In his mind people today are too risk-averse and need to learn to take more risk in a sensible manner, so he does provide a solution. It's not titled "Why is passive investing broken?" after all.
getting pretty tired of people saying they learned "lessons" whenever they lose money. when I asked specifically what those lessons were and how I can apply them, I never got a proper answer.
Because they are often specific and don't apply to people who don't even try in the first place. A lot of times, it involves a lack of attention to detail that the loss of money brings a very large light under that helps people understand how to prevent that and over time you will allow yourself to take risks without actually putting yourself in large danger by making hopefully many small mistakes that won't kill you
Yeah I'll tell you one right away, never ever sell stock (or naked call options in like I had once done when I was starting) short without any kind of hedge that turns unlimited risk into clearly defined risk. Stock was overvalued, price jumped regardless on quarterly earnings. Long story shory, I ended up with a sizeable short stock position because someone for whatever reason decided to exercise their options even though they still had a month before expiration. Thinking the stock would correct itself eventually, I decided to hold on to the shorted stock (which wasn't my plan to begin with, I would have accepted the loss from buying back the options if I had reacted in time). So the stock kept rising and rising and it was goddamn surprising. So it got me thinking, how do I correct this mistake as it only seems to be getting worse? I decided to buy a few long options, about 2.5x than what was enough to cover the shorted stock. Calculated risk, the stock kept on rising even further, I sold most of the call options at good profit and exercised the remaining ones to buy back my shorted shares at a price that was much lower than the current market price, although still at a loss. So yeah, while I lost a bit of money, I could have lost a lot more if I did not hedge while waiting for the stock to correct (which never happened by the way) and I could have lost way less if I had hedged correctly to begin with. Is this specific enough for you? I consider it a valuable lesson learned, I didn't just lose money, I was forcibly put into tough situation which required me to do some creative problem solving to get out of it and reduce my losses (which I could have negated altogether if I had taken more risk buying more long call options, but I wasn't after profit anymore, just wanted to protect myself from further losses and possibly reduce the amount of losses I was about to realize). Specific enough for you? Understand how to apply the lessons I learned from my mistake which led to another and why I actually thought that in the end, it was for the best that I ended up in this position (spoiler: forced to come up with a new solution to protect my savings on my own)? Now if I may ask in turn, why are you tired of not getting a proper answer and what do you even consider a proper answer?
Financial risk isn't something you evaluate on a case-by-case basis. Every investor needs a plan outlining her goals, risk tolerance, asset allocation and investing philosophy. In that doc, you can define your strategy concerning index funds vs. higher-risk investments (private equity, etc). Most people prefer indexing because it's a better fit for their desired level of risk.
Passive investment is bad because people aren't talking enough risk furthermore it is bad that people aren't taking enough risk and it's (apparently) the fault of passive investment. I am awesome because after years of failure one of my business ideas succeeded. Oh and a squeezed some used car dealer for $500 If this all sounds like bullshit, that because it is.
So the point is passive investing might be better financially but active investing will teach you lessons while you lose money that one day might come in hand and help you grab opportunities you would not have if you had not learned it. So I guess the best is to passive invest be be engaged. so one get the best of both worlds
sateforp Tom is an options trader and teaches options trading on his financial network, Tasty Trade. Tom wanted to talk specifically about that but TED thought the subject matter would be too complex for the audience. To your point above: If you are "engaged" then by definition you are not passive. I think you're confusing "passive investing" with a "buy and hold" strategy. They aren't necessarily the same. On numerous occasions Tom has expressed on his network how the vast majority of mutual funds and hedge funds have underperformed the market. There's a multi-trillion dollar industry out there only interested in you "passively investing" and letting them manage you money. Tom's argument is that the entire industry is only interested in telling you that finance is too complicated for you to do on your own and therefore you should let someone else manage your money in exchange for a fee. As a result, the financial literacy and understanding of risk in this country has gone basically to zero. In addition, the VAST majority of people who are having their money "managed" are getting worse returns than if they'd just bought the S&P 500 and held it...and they wouldn't have had to pay all those fees.
Michael Sartain Indeed, you are right to say that delegating your financial management is broken but the argument is the Market outperformed most funds/managers in the past few years. So the argument is in favour of investing in indexes. Which is why Tom probably didn't show statistcs to show that passive investing is broken because that would show that indexing is better then passive but TT actually says that options trading is the way to go. But as an option trader it is pretty hard to outperform the market trading options only. Of course there are other factors like market/beta exposure which is better when trading options but still I think he should have talked more about the technology innovation from dough.
Michael Sartain Good point about staying engaged! But I thought Tom was saying he could probably made more money holding his investments longer. So, he is admitting "buy and hold" could be more profitable. My understanding is, in a long term, active investing is safer than buy and hold because it is adaptable and antifragile against extreme events. So, you are not really giving up profits.
"...the VAST majority of people who are having their money 'managed' are getting worse returns than if they'd just bought the S&P 500 and held it." But index funds are the only practical way for investors to own the S&P.
This guy Tom Sos is the creator of ThinkOrSwim platform (1999/2000) and sold to TD Ameritrade ..... Now he is teaching for free to trade at Tasty Trade under his new platform TastyWorks with the lowest commission structure in the industry.
Amazing the people who will pass their money over to giant firms who have no real strategy in managing it and scoff at the idea of the free education that Tom offers in how to do it yourself. Yes free.Its his passion. This short clip does no justice to what he teaches daily for free.. No trial offers etc.. Free
There isn't any one video, There's quite a few. Just type in John Bogle in YT search results and that should help you find many geat videos where the man himself has given great interviews on his way of thinking.
Just follow strangles and straddles on index options selling with proper risk management. Aim for 4-5 % returns on monthly basis. Keep doing it AGAIN and AGAIN.
passive meaning investing in only paper assets and not building a business. taking risk worked for him and that is great but it is not for everyone. if he was an idiot he might have went 0 for 20 and index investing might have been a better choice. but I think his point is clear if you want massive wealth you need to build a business which is alot riskier then a 9 to 5 job. But by taking a risk there is a chance of a big reward. or you could climb the ladder of a large company. but more fun to create your own vision/company.
If you are passive, you are vulnerable and someone will take advantage of you for sure because passivity means you are either non-reactive or predictable. When something in the stock market is predictable, soon an algorithm will pop to milk everything it can from it. What counter-argument can there possibly be against properly active hedging for some insurance as one example? It's only a matter of time another financial crisis comes and shocks the stock market. Sure you can just wait it out, but that would still erase years of saving(s) before you recover. Well not exactly erase, but put that capital into some other persons portfolio which was either proactive or reactive enough.
It didn't feel like bragging to me. It was a necessary thing to mention so he wasn't talking out of his arse so to speak. Talking about making terrible investment decisions isn't really bragging either. Most of us are guilty of them though, but we should learn from them and apply take some risk like he did with his business venture and then we could potentially be rewarded handsomely. You need to have good grasp of what you are risking though and what you are potentially gaining and what is the probability of either outcome (success or failure).
It is good to risk small amounts of your time and money on experiments. That's how you learn. Also, you can learn from other people's mistakes for free. When you're knowledgable the risk is minimal. Use a mentor and you can avoid risk altogether.
Nobody really knows what the markets are going to do in the future, not active managers, not anyone. You cannot illiminate all risk in investing. No pain no gain. But there are some simple rules to follow, we want to Invest, not gamble with our money. Investing is a long term project, buy and hold no matter what happens. Keep costs low, and be well diversified across regions, sectors & asset classes. So this means using low cost well diversified index or etf funds that track broad market indexes, buy the whole haystack don't gamble on individual regions. And the same with bond funds, fur US Investors say total bond index or UK investors global aggregate bond index Hedged back to stirling to cut the currency risk. Rebalance once a year, no market timing
He spent 17 mins to tell people taking risk and learn how to risk based on his experience, but never mentioned a word of how. Don't waste 17 mins of your life to listen his bragging of how much money he made. TED is getting worse and worse
You're missing the point. He's trying to convey that he would have never gotten rich if he didn't take risk, make bad decisions, learn from them and not let them scare him away. Quantitative risk in relation to what YOU are doing if you like fancy words, pot odds if you prefer simple analogies. He did mention how, you just didn't understand it and that's why you wasted your precious minutes. Notice the three letters I typed with caps, he actually says that in the end of the video. How the hell is he supposed to know what you are doing, so what exactly is he supposed to do, try to guess your exact investing strategy and explain to you the quantitative risk involved?
yeah but he's saying this from the perspective of someone who got REALLY rich. a wise person would just make low-risk investments with the millions he lost and have more years of prosperity than this guy even though they would't get the extreme of tens of millions quickly
while i agree that today's society (especially America and Western Europe) are very risk averse, he completely failed to explain why taking risks is beneficial. he lost ~1 million dollars over a 20 year span and used the "lessons" he learned from that to save 500 bucks on a car?
I didn't see the clip yet, but actually he has made hundreds of millions of dollars til now by active investing :3 I have been watching his real trade live every single day, ( from dough) and he really makes tons of money every single day.
lol you clearly don't understand trading. If you took the time to understand what he does, you would know this guy is not full of shit. How the fuck could he develop tos without a shit load of money. I use the tech, I understand the methodology, and I'm here to tell you it works.
So I'm two minutes in and this is already pissing me off. The current financial landscape exists because pensions were phased out in favor of 401ks. The financial system SHOULD be simple because it's stupid to think that we can all be financial experts.
Congrats on building ThinkorSwim, but beyond that, the messaging was terribly lacking. Unclear how 'Passive investing is Broken', and less clear how you're fixing it.
Am I understanding this correctly? In summary, he took risks by doing active trading multiple times and lost money each time...The lesson he learned was that he couldn't make money by doing active trading, but he could make money by selling a tool to people who wanted to do active trading. Then he suggests that the risk of active trading and the risk of lowballing at a car dealership is the same, so you should do it...
likewise, all i got was he "learnt" from his losses, by creating financial software, tools for trading, etc. Besides, he is completely honest about NOT caring about the losses, or OTHER PEOPLE'S MONEY...
I I don't totally understand what this guy was getting at. about right and wrong and risk. My takeaway here was "take risk so you can win".... don't we all know that?
The only risk is not the free market because the free market doesn't care about race, creed, social status, country, wealth or poverty, whatever or whoever. The biggest risk are from high fees, charges, commissions, loads, and performance fees from active investing.
His advice sucks and is harmful. 75% (give or take) of active investors fall below the average market return. This is individual investors and fund managers. So if you invest in market index mutual funds and get 'average' returns you're getting above average returns. Not to mention that most active trading or actively managed funds have huge expense ratios/fees compared to certain passive funds. Well chosen passive investing is 100x simpler than active investing and much more profitable for the majority of people.
But what is stopping individual investors form actually learning? Fund managers don't really care because it's not their money they are investing with and many mutual funds are in fact "closet index funds". Majority of the people don't understand investing or how the markets work, so obviously something simple is more profitable for them in the beginning. If you listen to his advice, he says that with a simple buy and hold strategy he could have probably made on okay return, but because he decided to actually learn how the stock market works (which was a process that cost him a lot of money), he made much, much more than anybody could have through passive investing.
Nothing is stopping investors from furthering their education on investing. All it takes is time and effort right? Except that already removes a lot of people. Some don't want to be bothered with learning and are happy to take stock tips from their neighbor/newspaper/media of choice and call it a day. Others genuinely don't have the time, busy work life, home life, and whatnot. So that leaves us with those who have the time and energy. And they learn. But those people are still competing against geniuses, insider traders, and people who do stocks for a living- people who live and breath this stuff. How much is spending an hour a day going to help against opponents like these? Read this to see what I mean: www.businessinsider.com/the-richard-wyckoff-stock-trading-method-2013-2?op=1 On top of that, you not only have to beat the market to beat passive investing, you have to beat it by more than the expenses you incur from active trading. So not all of that 25% that 'beat' the market actually come out ahead of the average return. On top of that you won't ever go broke investing in a mutual fund that mirrors the S&P 500 or the whole stock market like this guy did. By investing passively, you become internationally diversified because so many companies have global reach. It's just so much safer, so much less time, so much less effort, so much less stress and you still beat over 75% of EVERYONE. Plus 'average' returns will still buy you financial independence MUCH quicker than you would think.
I watch this guy on tasty trade. Its always vague BS, like this video. They never give any specifics regarding trading techniques, how to actually do it etc etc. its always a "personal" experience. What he doesn't tell you is that he made his millions creating Think or Swim and then selling the company, which is cool, but he's not making his living from trading. Same ole Same ole.
That is utter bullshit. They not only give you specifics but they suggest specific trades that are usually profitable. Tastytrade is doing "average" investors a huge favor by teaching fairly sophisticated techniques based on solid research.
Thank you sir. I am so hungry to learn to invest wisely, to start a business and succeed, to write a successful novel and do a movie with it. I also want to help homeless people and be a blessing to others!!!! I hate poverty!!!
I have been seeing traders commenting and recommending Mr Frank Robert strategy and i put in a trial on him to the Glory of GOD he shewn me truly he is for real one of the best Account Managers in the Forex /binary option trading. Trading with him i make $13k us.dollar every week, indeed i have much regards for him.
Trading is zero sum game so how this speech is supposed to be beneficial to community as a whole? It will certainly be beneficial for brokers, trading educators and trading scammers and charlatans (which is 99% of trading products on internet).
+Raf Zas The points made in this video are vague enough so I'd say it is beneficial to the community as a whole. It doesn't even go into investing or trading that much, just risk in general and how people have gotten very risk-averse in a time period when risk (interest rates) is relatively cheap. For every winner there is (usually) a loser and being passive when investing can tilt your odds towards losing money. Learn from your mistakes, don't repeat them and don't randomly throw your money away in a coin-flip where the odds are against you. It is also an illusion to think that everyone else is better than you and therefore you have no chance of winning or being profitable ever. Investing randomly and generally being passive about your investing such as refusing to learn anything about whatever it is you decide to invest in is usually a bad thing for anyone.
+Eivitussaole Well, if it is about risk e.g. leaving "safe" job and try something more challenging, interesting or rewarding then yes, people became too risk-averse. I have focused here on trading because I have spend fair amount of time and energy on it including many months of writing programs analysing price behaviour in last 5 to 15 years. People are not aware how markets are incredibly close to being 100% random. On top of that you always pay transaction costs so It is extremely difficult to be profitable in the long term. Unfortunately there is strong self-attribution bias - people are profitable in short term and they want to believe it is because they are so smart. In reality it is natural distribution of probabilities - there will always be somebody who makes money just by chance the same way as there is always somebody who wins lottery. I'm not saying it is impossible to do it , I'm saying it is very, very difficult. Among retail traders there is probably more money being made by selling worthless product and trading courses to gullible people who think it is easy or/and they are smarter than everyone else. The same way as almost every man thinks he is better than average driver - how can you be better than average driver when below average drivers don't exist? At the beginning I was thinking exactly the same. I have spend a bit of time for education, read some clever articles about money management, trading discipline, trading psychology, reasons why people lose money trading and I thought it would immediately put me ahead of others. Today I understand how wrong I was. I will say again, it is possible to put odds in your favour and make money in the market, however, required amount of work, time and energy is enormous and it can be compared with getting degree. Anyone who expresses different opinion is either delusional or has self-interests in doing so (e.g. brokers and trading "educators"). And that is why I think encouraging average Joe just to jump it is irresponsible. I highly recommend watching two short youtube videos by people with credentials: 1. "Making Money in the Stock Market: What makes a Good Trader" - by surprisingly honest former broker (don't miss his last sentence). 2. "Do some Traders have the Gift of Intuition?" - by London City trader Both are on UKspreadbetting channel.
I agree almost completely, the only thing that I disagree with is the notion that it is very very difficult to be profitable. In part for the same reasons you say it is very difficult, I say it's not that hard although nothing that is good comes easy either. Consider the fact how many traders are unsuccessful and believe they can consistently predict the market, it is quite a large percentage indeed. Now if it truly is a zero-sum game, then the only thing you need to do to be profitable is to do the opposite, right? Don't try to predict the market, you can take neutral positions with well defined risk that profit from the passage of time instead for example if that is your thing. Your counterparty will likely be someone who wants to either speculate or buy insurance/hedge. It is true that there are no free lunches and nobody in their right mind would give away a profitable strategy for free, but the time it takes to educate yourself with the necessary basics is much less today than it was some years ago, thanks to modern (free) software that does are the math related computational work for you when it comes to probabilities and the wealth of information available on the internet. How is it even possible to calculate something like probability of profit? Well exactly because the markets are very close to 100% random. Everyone still has to find their own little niche that gives them the competitive advantage on their own, which is the hardest part in my opinion. While I do believe it definitely isn't in the best interest for everyone to manage their money/savings on their own (some people just aren't built for it), I still think it's a good skill to learn for most people rather than let someone else manage that money for a (most often) hefty fee over years. Not necessarily because they would be the better than average driver, but because I for one would definitely rather be behind the wheel myself when driving in hazardous weather rather than pay someone else drive the car that I own remotely (they assume no risk from a car crash, only reward). Especially when you remind yourself how terribly those so called professional money managers (or remote drivers in this analogy) perform. We have had studies where monkeys and cats outperform experts, so all there is to do is to find a different approach to the market compared to what the vast majority is doing (and performing terribly at it). If you think about the fact that the majority of the professional financial world can perform so bad and keep doing the same exact thing year after year earning millions, it kind of gives the edge to the retail investor who realizes a) how bad it is to give their money for someone else to manage and b) that they have to do something different than all the under performers, not try to beat them in the same game that leads to inferior results in most cases even if you spent your whole youth getting a business degree. Only when people stop giving away their money to horribly performing 'professionals' for crazy fees thinking they are making great deals will we start seeing good opportunities for the average Joe to have their savings managed by someone else. That is why everyone should learn at least a little bit more about the markets, it should lead to benefits for the whole community. If the markets are efficient and therefore random, it also means there are people who believe it to be inefficient and employ strategies that try to take advantage of these perceived inefficiencies. If you can figure out what these people are doing, then you can play the 'efficient and random market' strategy which should lead to superior results over time. It isn't as easy as I may make it sound, but due to the sheer number of people believing that the markets aren't random (with a very small upside skew), it isn't too hard to pull off either in my opinion. No get rich fast schemes out there for the average Joe, but superior results compared to passive investing if you spend some time educating yourself? I do believe so. In the end, it is the very same human nature which leads to losses that allows for there to be something of which to take profit from, you just need to think more like a machine.
+Eivitussaole I agree, actively managed funds are rip off. The fact that so many people still use them proves their lack of awareness. For average person probably the best solution is to buy stock index (as long as they don't do it at historical highs) and apply buy and hold strategy.
+Raf Zas I'm unsure of how it's a zero-sum game. Could you explain? If a company issues shares at an IPO to raise funds for their business and I buy their stock at $20 and sell it at $40, that implies that their firm value has increased by $20 per share and I've myself made $20 from the trade. It's a win-win for both.
Wow. He just stated ( 11:20 )that since he sucks at investing, he quite investing and created a platform for other people to lose THEIR money. Screw this guy.
Tom was a an option trader in the Chicago board of trade for 20 years. He made enough money trading that he was able to spent millions of dollars creating a fantastic software like thinkorswim. What do you mean he did not succeed?
Squeezing someone for 500 bucks when you are a millionaire is freaking selfish!!!!! He shouldn't be proud of it. Financial education and taking risks are important but being a jerk is not part of it.
He didnt squeeze a thg, he made an offer, and the salesman accepted it. that was a fair deal. Why millionaire shouldnt negotiate for 500 off? The face value of 500 is equal for everyone, and as far as i know, most of the millionaire get wealthy cause they save, invest and compound.
Am I the only one who missed the point at which Mr. Sosnoff ACTUALLY EXPLAINED exactly how to "fix" the suposedly "broken" passive investing? If his "message" was simply to take risks when making investment decisions, and espousing the old saw regarding the potential "risk vs. reward" advantages...I just allowed him to waste over seventeen minutes of my most valuable possession - TIME REMAINING IN MY LIFE! - which is something that I will never recover/regain. Even WORSE than that, he did so in an insipidly boring fashion. Talk about adding insult to injury. Oh well, I should have expected it, I absolutely hated Chicago within the first five minutes of my arrival on my first ever visit to that shittiest of cities in the U.S., in 1982. I lasted three days before deciding that I'd rather die a slow horrible death than to spend one more minute in that hole. I've never returned (and never will), and consider it the worst weekend I've ever experienced in my life that didn't involve the death of a friend or family member. What made it such a horrendous place - the people - every, single one of them that I encountered during those three days, without exception. I was completely and totally nonplussed! Detroit, Miami, New York, Jersey City, Flint, Dallas, San Diego, L.A., Atlanta, San Francisco, Houston, New Orleans, Little Rock, Memphis, Las Vegas, Phoenix, Denver, Seattle, Portland, Kansas City, St. Louis, Cincinati, Pittsburgh, Louisville...you name it. Every single one of them seemed like a model, or haven, of hospitality in comparison. Thanks, SOOOoooo MUCH oh great learned one!!
Over the long term , index funds work, mutual funds don't ! The numbers bear this out! Anything else is sales. Read" Where are all the cusomers' yachts"!
Google "Tastytrade" "shill" "sosnoff" for a, shall we say...."interesting" article called "A Shill with Skills" (you could google that in quotes as well)...and I happen to agree with the article. :).
Yet another talk claiming that "investing" or brokering is the same as working, or producing something useful. It isn't, and never was. People who create real wealth MAKE things, DESIGN things, or offer a useful SERVICE to others.
He says that but owns the trading company and derives income from it.... When your income depends on people making as many trades as possible, you will send this message out. In his mind, it's acceptable because he believes it. If he were really active investor why doesn't he post his trades WITH the historical result of his trades? This is already a red flag. He believes what he says but he doesn't have the results to show for it. I spent 2 years trading the tasty trade way. I made more money holding an index fund because of low costs and the upwards trend of the market over long periods of time. Passive investing isn't broken. If it were broken nobody would hold assets or businesses. He himself owns his own company why doesn't he trade it off? Why doesn't he continue his work on the market floor? Walk the walk Sosnoff. The only reason he hasn't been called out for his ludicrous assertion is he knows how to sound smart with lots of jargon. Buffett still richer than you Sosnoff and made more money than you. Deal with it, with all due respect.
He doesn't say anything. This all seems like an advertisement for his new company. Summary: "I failed 19 times over 20 years, then one investment I made was bought by Ameritrade and now I'm rich! That's risk baby! Also, even though I'm super rich from that stroke of luck, I still like to force commission salesmen to sell cars for $500 less than their minimum for kicks.
This is very dangerous advice. Follow warren buffets advice, learn from other peoples mistakes so you dont have to make them. Rule number one, always protect your capital. and rule number two, dont forget rule number one.
Tom Sosnoff is a legend in options trading. His passion for retail trading is unparalleled. Tom is a mentor and an inspiration. Thank you.
It's hard for most folks to understand this message. His message is right about outcomes, probability of success and investing. but most people don't have the time, patience and perseverance to do it.
Best quote I’ve heard about investment came from a financial professional at MIT:
“The great advantage about investing in stocks is that the most you could possibly lose is everything.”
Love it
Instead of "Should I take risks in investing?" maybe it should be "Can I find the right amount of risk that suits my financial situation and psychological comfort?" You can choose your amount of risk by the investments you make.
Love Tom Sosnoff, he's out there doing great things teaching people financial literacy.
The lack of new entrepreneurs isn't due to fear of risk taking. Look at sports betting - it's popularity has never been higher & it is being legalized in more states because people are seeking it out in states other than their home state. There are fewer entrepreneurs because everything is overregulated to the point that local & federal governments have made it impossible or too complicated to do anything. This has been accomplished by wealthy individuals & corporations lobbying government for more regulation to gatekeep their industries. & Sh*+ , just the insurance requirements for starting any sort of endeavor immediately puts a new business's overhead at a level requiring crazy investment just to start a lemonade stand.
This is one of the guys who i wokdk literally give my money to to invest. That's how trustworthy he feels..you know, that gut feeling
Passive investing is superior, not because of risk aversion, but because you don't waste all your gains on trading costs and short term capital gains taxes.
Agreed. It has those advantages. But it still depends. Sometimes passive is better. Sometimes active is better.
capital gains taxes are lower than regular w2 taxes though
Antonio Esquivel It depends what tax bracket you are in, But it's irrelevant. The question is whether active or passive investment strategies are more profitable, not whether one should invest vs. just get a job.
Short term capital gains taxes? Don't have those in my country. Trading costs? We get to reduce trading costs from capital gains taxes. I could actually earn money by simply spending enough money in trading costs with the goal of ending up exactly at +0% gain when the tax year ends because that's not all there is to it either. We do have other stupid things to make up for it that the US doesn't, though. Like no DRIP investing or extra taxation on dividends from ETFs.
Also, The Intelligent Investor was written almost 70 years ago, I'm not saying it doesn't have some good wisdom in it, just saying it's outdated as hell seeing as how they didn't even have proper computers, online brokers, high-frequency trading, trading computer algorithms etc. It also doesn't take into account how ridiculously rich a small percentage of the population has gotten and how they just keep getting richer and richer while the rest of us keep getting poorer and poorer, relatively speaking at least.
That highly depends on where you live. For me, capital gains are higher taxed income.
The title for this talk fails to match the content of the talk.
I disagree. In his mind people today are too risk-averse and need to learn to take more risk in a sensible manner, so he does provide a solution. It's not titled "Why is passive investing broken?" after all.
Only Tom could open a speech on options and risk by the notion of right and wrong!
getting pretty tired of people saying they learned "lessons" whenever they lose money. when I asked specifically what those lessons were and how I can apply them, I never got a proper answer.
You learn to not do that exact mistake again. how hard is that to understand?
I started a month ago and learn 4 great rules :/ n making money it's not that hard
easy concept...
TOUCH FIRE=PAIN=
DON'T TOUCH FIRE
Because they are often specific and don't apply to people who don't even try in the first place. A lot of times, it involves a lack of attention to detail that the loss of money brings a very large light under that helps people understand how to prevent that and over time you will allow yourself to take risks without actually putting yourself in large danger by making hopefully many small mistakes that won't kill you
Yeah I'll tell you one right away, never ever sell stock (or naked call options in like I had once done when I was starting) short without any kind of hedge that turns unlimited risk into clearly defined risk. Stock was overvalued, price jumped regardless on quarterly earnings. Long story shory, I ended up with a sizeable short stock position because someone for whatever reason decided to exercise their options even though they still had a month before expiration.
Thinking the stock would correct itself eventually, I decided to hold on to the shorted stock (which wasn't my plan to begin with, I would have accepted the loss from buying back the options if I had reacted in time). So the stock kept rising and rising and it was goddamn surprising. So it got me thinking, how do I correct this mistake as it only seems to be getting worse? I decided to buy a few long options, about 2.5x than what was enough to cover the shorted stock. Calculated risk, the stock kept on rising even further, I sold most of the call options at good profit and exercised the remaining ones to buy back my shorted shares at a price that was much lower than the current market price, although still at a loss.
So yeah, while I lost a bit of money, I could have lost a lot more if I did not hedge while waiting for the stock to correct (which never happened by the way) and I could have lost way less if I had hedged correctly to begin with. Is this specific enough for you? I consider it a valuable lesson learned, I didn't just lose money, I was forcibly put into tough situation which required me to do some creative problem solving to get out of it and reduce my losses (which I could have negated altogether if I had taken more risk buying more long call options, but I wasn't after profit anymore, just wanted to protect myself from further losses and possibly reduce the amount of losses I was about to realize).
Specific enough for you? Understand how to apply the lessons I learned from my mistake which led to another and why I actually thought that in the end, it was for the best that I ended up in this position (spoiler: forced to come up with a new solution to protect my savings on my own)?
Now if I may ask in turn, why are you tired of not getting a proper answer and what do you even consider a proper answer?
Financial risk isn't something you evaluate on a case-by-case basis. Every investor needs a plan outlining her goals, risk tolerance, asset allocation and investing philosophy. In that doc, you can define your strategy concerning index funds vs. higher-risk investments (private equity, etc). Most people prefer indexing because it's a better fit for their desired level of risk.
Am I missing something? I don't get the message!
Passive investment is bad because people aren't talking enough risk furthermore it is bad that people aren't taking enough risk and it's (apparently) the fault of passive investment. I am awesome because after years of failure one of my business ideas succeeded. Oh and a squeezed some used car dealer for $500
If this all sounds like bullshit, that because it is.
What you can measure you can manage?
He is saying that one must take risk to succeed and that he wouldn’t be where he is if he hadn’t taken risk.
So the point is passive investing might be better financially but active investing will teach you lessons while you lose money that one day might come in hand and help you grab opportunities you would not have if you had not learned it.
So I guess the best is to passive invest be be engaged. so one get the best of both worlds
sateforp Tom is an options trader and teaches options trading on his financial network, Tasty Trade. Tom wanted to talk specifically about that but TED thought the subject matter would be too complex for the audience. To your point above: If you are "engaged" then by definition you are not passive. I think you're confusing "passive investing" with a "buy and hold" strategy. They aren't necessarily the same. On numerous occasions Tom has expressed on his network how the vast majority of mutual funds and hedge funds have underperformed the market. There's a multi-trillion dollar industry out there only interested in you "passively investing" and letting them manage you money. Tom's argument is that the entire industry is only interested in telling you that finance is too complicated for you to do on your own and therefore you should let someone else manage your money in exchange for a fee. As a result, the financial literacy and understanding of risk in this country has gone basically to zero. In addition, the VAST majority of people who are having their money "managed" are getting worse returns than if they'd just bought the S&P 500 and held it...and they wouldn't have had to pay all those fees.
Michael Sartain Indeed, you are right to say that delegating your financial management is broken but the argument is the Market outperformed most funds/managers in the past few years. So the argument is in favour of investing in indexes. Which is why Tom probably didn't show statistcs to show that passive investing is broken because that would show that indexing is better then passive but TT actually says that options trading is the way to go. But as an option trader it is pretty hard to outperform the market trading options only. Of course there are other factors like market/beta exposure which is better when trading options but still I think he should have talked more about the technology innovation from dough.
Michael Sartain Good point about staying engaged! But I thought Tom was saying he could probably made more money holding his investments longer. So, he is admitting "buy and hold" could be more profitable. My understanding is, in a long term, active investing is safer than buy and hold because it is adaptable and antifragile against extreme events. So, you are not really giving up profits.
"...the VAST majority of people who are having their money 'managed' are getting worse returns than if they'd just bought the S&P 500 and held it." But index funds are the only practical way for investors to own the S&P.
claimed that he will show how to fix it , 17min later never said anything about it but infact marketed him self . LIKE A TRUE BROKER
Secret of investing: Pot Odds!
There.. i saved you 17min of your life.
This guy Tom Sos is the creator of ThinkOrSwim platform (1999/2000) and sold to TD Ameritrade ..... Now he is teaching for free to trade at Tasty Trade under his new platform TastyWorks with the lowest commission structure in the industry.
He's selling your zero edge flow to market making companies who are making a fortune from the Tastytrade punters.
Amazing the people who will pass their money over to giant firms who have no real strategy in managing it and scoff at the idea of the free education that Tom offers in how to do it yourself. Yes free.Its his passion. This short clip does no justice to what he teaches daily for free.. No trial offers etc.. Free
I think I'll stick with Bogle's advice.
yes, me too. I am not a trader, I am an investor.
Victoria could you suggest me a good video for the bogle mindset? :P
There isn't any one video, There's quite a few. Just type in John Bogle in YT search results and that should help you find many geat videos where the man himself has given great interviews on his way of thinking.
Me too.
@@noahhubscher2926 I recommend the book Simple Path to Wealth. Explains Bogle mindset for retirement investing.
Just follow strangles and straddles on index options selling with proper risk management. Aim for 4-5 % returns on monthly basis. Keep doing it AGAIN and AGAIN.
I don't know what this Ted Talk has to do with passive investing.
visit his site... tastytrade.com. You'll understand in about a week or two.
I missed it too
Don't go to Tastytrade you'll lose all your money!!
Think or swim is amazing!!!!!!! you are the man!
passive meaning investing in only paper assets and not building a business.
taking risk worked for him and that is great but it is not for everyone.
if he was an idiot he might have went 0 for 20 and index investing might have been a better choice.
but I think his point is clear if you want massive wealth you need to build a business which is alot riskier then a 9 to 5 job. But by taking a risk there is a chance of a big reward. or you could climb the ladder of a large company. but more fun to create your own vision/company.
message wasn't clear enough, just lost my house and I am now living in a cardboard box outside Taco Bell. Thanks
Not sure I totally buy it but I like the guy and the sentiment
why passive income is broken I do not understand.
Watch the clip ?
Negative interest rates.
If you are passive, you are vulnerable and someone will take advantage of you for sure because passivity means you are either non-reactive or predictable. When something in the stock market is predictable, soon an algorithm will pop to milk everything it can from it.
What counter-argument can there possibly be against properly active hedging for some insurance as one example? It's only a matter of time another financial crisis comes and shocks the stock market. Sure you can just wait it out, but that would still erase years of saving(s) before you recover. Well not exactly erase, but put that capital into some other persons portfolio which was either proactive or reactive enough.
It says "passive investing".. not passive income.
What you can measure you can manage?
I agree, the theme is clear but there’s really no practical takeaways other than one method for squeezing the salesman in a car dealership
Don't be deceived by the title. He never explains why passive investing is "broken". This is 17 minutes I'll never get back.
Thanks for the warning. I moved on.
This had nothing to do with fixing passive investment! He just wanted brag!
It didn't feel like bragging to me. It was a necessary thing to mention so he wasn't talking out of his arse so to speak. Talking about making terrible investment decisions isn't really bragging either. Most of us are guilty of them though, but we should learn from them and apply take some risk like he did with his business venture and then we could potentially be rewarded handsomely. You need to have good grasp of what you are risking though and what you are potentially gaining and what is the probability of either outcome (success or failure).
This talk should not have an X !!
this is one of the most valuable speech i have listen to in Years.
Mario Hennenberger Too bad you forgot to add ""
It is good to risk small amounts of your time and money on experiments. That's how you learn. Also, you can learn from other people's mistakes for free. When you're knowledgable the risk is minimal. Use a mentor and you can avoid risk altogether.
HNTR KLLR not always... and risk itself is subjective to what one finds risky.
Nobody really knows what the markets are going to do in the future, not active managers, not anyone. You cannot illiminate all risk in investing. No pain no gain. But there are some simple rules to follow, we want to Invest, not gamble with our money. Investing is a long term project, buy and hold no matter what happens. Keep costs low, and be well diversified across regions, sectors & asset classes. So this means using low cost well diversified index or etf funds that track broad market indexes, buy the whole haystack don't gamble on individual regions. And the same with bond funds, fur US Investors say total bond index or UK investors global aggregate bond index Hedged back to stirling to cut the currency risk. Rebalance once a year, no market timing
Conflict of interest is not broken. Run a brokerage=push risk!
Why didn't they show his slides? That's always a big part of the presentation...
He spent 17 mins to tell people taking risk and learn how to risk based on his experience, but never mentioned a word of how.
Don't waste 17 mins of your life to listen his bragging of how much money he made.
TED is getting worse and worse
The "how" of what to do is different for everybody. If you don't have the skills to apply that bit of wisdom, then you just wasted 17 minutes.
AmazingSase this had nothing to do with TED anyone can give a Ted talk
You're missing the point. He's trying to convey that he would have never gotten rich if he didn't take risk, make bad decisions, learn from them and not let them scare him away.
Quantitative risk in relation to what YOU are doing if you like fancy words, pot odds if you prefer simple analogies. He did mention how, you just didn't understand it and that's why you wasted your precious minutes. Notice the three letters I typed with caps, he actually says that in the end of the video. How the hell is he supposed to know what you are doing, so what exactly is he supposed to do, try to guess your exact investing strategy and explain to you the quantitative risk involved?
yeah but he's saying this from the perspective of someone who got REALLY rich. a wise person would just make low-risk investments with the millions he lost and have more years of prosperity than this guy even though they would't get the extreme of tens of millions quickly
Go to tasty trade and you can learn everything about options. Tom founded tastytrade to be able to teach people for free
while i agree that today's society (especially America and Western Europe) are very risk averse, he completely failed to explain why taking risks is beneficial. he lost ~1 million dollars over a 20 year span and used the "lessons" he learned from that to save 500 bucks on a car?
I didn't see the clip yet, but actually he has made hundreds of millions of dollars til now by active investing :3
I have been watching his real trade live every single day, ( from dough) and he really makes tons of money every single day.
He made his millions by being a founder of ThinkOrSwim, not by actively trading in and out of the markets.
lol you clearly don't understand trading. If you took the time to understand what he does, you would know this guy is not full of shit. How the fuck could he develop tos without a shit load of money. I use the tech, I understand the methodology, and I'm here to tell you it works.
it's mental game he pointed that out :/
He used the lessons he learned taking risks to build a successful company which he sold for hundreds of millions of dollars.
okay, AMD stock, going all in
Good for you! It's nearly doubled!
So I'm two minutes in and this is already pissing me off. The current financial landscape exists because pensions were phased out in favor of 401ks. The financial system SHOULD be simple because it's stupid to think that we can all be financial experts.
there is no right or wrong for the godless; ergo, no evil. you must first agree with his premise to continue viewing
Survivorship bias.
ArashG: True that. How about all the guys that lost a million and then didn't get rich. Haven't seen them on TED.
It's too bad I cannot give than one thumbs up to this comment. I was screaming this phrase the whole time I was watching this video.
another marketing video. TED sort your shit out.
StormySeb
Congrats on building ThinkorSwim, but beyond that, the messaging was terribly lacking. Unclear how 'Passive investing is Broken', and less clear how you're fixing it.
beautiful lesson about life. embrace life and risk assessment.
Am I understanding this correctly?
In summary, he took risks by doing active trading multiple times and lost money each time...The lesson he learned was that he couldn't make money by doing active trading, but he could make money by selling a tool to people who wanted to do active trading. Then he suggests that the risk of active trading and the risk of lowballing at a car dealership is the same, so you should do it...
likewise, all i got was he "learnt" from his losses, by creating financial software, tools for trading, etc. Besides, he is completely honest about NOT caring about the losses, or OTHER PEOPLE'S MONEY...
Love this dude
wow ted is getting some real interesting speakers from the bus station...
hide your quarters...
The title is just bad. It's not what the speaker intends to speak about.
I I don't totally understand what this guy was getting at. about right and wrong and risk. My takeaway here was "take risk so you can win".... don't we all know that?
The only risk is not the free market because the free market doesn't care about race, creed, social status, country, wealth or poverty, whatever or whoever. The biggest risk are from high fees, charges, commissions, loads, and performance fees from active investing.
I saw another video of him going on about how hard he got hammered in 1987. Listen to Buffet and Bogle, buy index funds and hold them.
Huh?
yeap
What does the expression "o for 19" @ 9:21 means?
O means zero in that context. So out of 19 tries, he failed every time and won zero times. He went 0-19 (like a record of a sports team)
Make sense ;) thanks
the title and talk have no connection
His advice sucks and is harmful. 75% (give or take) of active investors fall below the average market return. This is individual investors and fund managers. So if you invest in market index mutual funds and get 'average' returns you're getting above average returns. Not to mention that most active trading or actively managed funds have huge expense ratios/fees compared to certain passive funds. Well chosen passive investing is 100x simpler than active investing and much more profitable for the majority of people.
But what is stopping individual investors form actually learning? Fund managers don't really care because it's not their money they are investing with and many mutual funds are in fact "closet index funds". Majority of the people don't understand investing or how the markets work, so obviously something simple is more profitable for them in the beginning. If you listen to his advice, he says that with a simple buy and hold strategy he could have probably made on okay return, but because he decided to actually learn how the stock market works (which was a process that cost him a lot of money), he made much, much more than anybody could have through passive investing.
Nothing is stopping investors from furthering their education on investing. All it takes is time and effort right? Except that already removes a lot of people. Some don't want to be bothered with learning and are happy to take stock tips from their neighbor/newspaper/media of choice and call it a day. Others genuinely don't have the time, busy work life, home life, and whatnot.
So that leaves us with those who have the time and energy. And they learn. But those people are still competing against geniuses, insider traders, and people who do stocks for a living- people who live and breath this stuff. How much is spending an hour a day going to help against opponents like these? Read this to see what I mean: www.businessinsider.com/the-richard-wyckoff-stock-trading-method-2013-2?op=1
On top of that, you not only have to beat the market to beat passive investing, you have to beat it by more than the expenses you incur from active trading. So not all of that 25% that 'beat' the market actually come out ahead of the average return. On top of that you won't ever go broke investing in a mutual fund that mirrors the S&P 500 or the whole stock market like this guy did. By investing passively, you become internationally diversified because so many companies have global reach.
It's just so much safer, so much less time, so much less effort, so much less stress and you still beat over 75% of EVERYONE. Plus 'average' returns will still buy you financial independence MUCH quicker than you would think.
There isn't much here to justify the time. I think there isn't anything more than promoting himself ("I gave a talk. It's in you tube").
а выкуп акций и выплата долгов, этой же фирме, хоть кто развправал, и начислел себе зарплаты, и премии не известно в школе задумывался
I watch this guy on tasty trade. Its always vague BS, like this video. They never give any specifics regarding trading techniques, how to actually do it etc etc. its always a "personal" experience. What he doesn't tell you is that he made his millions creating Think or Swim and then selling the company, which is cool, but he's not making his living from trading. Same ole Same ole.
+John Ferro you must not pay attention to the in depth research the network does...turn off ESPN in the back ground so you can really hear it. =)
Totally disagree-he is very transparent.
John Ferro Good Businesses don't reveal what makes them 😊
That is utter bullshit. They not only give you specifics but they suggest specific trades that are usually profitable. Tastytrade is doing "average" investors a huge favor by teaching fairly sophisticated techniques based on solid research.
There's no way on the planet you have EVERY watched tastytrade and came away with this absurd statement
Lesson: You're the real bum if you don't take risks.
Thank you sir. I am so hungry to learn to invest wisely, to start a business and succeed, to write a successful novel and do a movie with it. I also want to help homeless people and be a blessing to others!!!! I hate poverty!!!
If he was trying to make a point. He failed.
It's all about costs, Passive is always cheaper so always beats managed.
Hey, it is that guy from TastyKakes.
I have been seeing traders commenting and recommending Mr Frank Robert strategy and i put in a trial on him to the Glory of GOD he shewn me truly he is for real one of the best Account Managers in the Forex /binary option trading. Trading with him i make $13k us.dollar every week, indeed i have much regards for him.
Trading is zero sum game so how this speech is supposed to be beneficial to community as a whole? It will certainly be beneficial for brokers, trading educators and trading scammers and charlatans (which is 99% of trading products on internet).
+Raf Zas The points made in this video are vague enough so I'd say it is beneficial to the community as a whole. It doesn't even go into investing or trading that much, just risk in general and how people have gotten very risk-averse in a time period when risk (interest rates) is relatively cheap. For every winner there is (usually) a loser and being passive when investing can tilt your odds towards losing money. Learn from your mistakes, don't repeat them and don't randomly throw your money away in a coin-flip where the odds are against you. It is also an illusion to think that everyone else is better than you and therefore you have no chance of winning or being profitable ever. Investing randomly and generally being passive about your investing such as refusing to learn anything about whatever it is you decide to invest in is usually a bad thing for anyone.
+Eivitussaole Well, if it is about risk e.g. leaving "safe" job and try something more challenging, interesting or rewarding then yes, people became too risk-averse. I have focused here on trading because I have spend fair amount of time and energy on it including many months of writing programs analysing price behaviour in last 5 to 15 years. People are not aware how markets are incredibly close to being 100% random. On top of that you always pay transaction costs so It is extremely difficult to be profitable in the long term. Unfortunately there is strong self-attribution bias - people are profitable in short term and they want to believe it is because they are so smart. In reality it is natural distribution of probabilities - there will always be somebody who makes money just by chance the same way as there is always somebody who wins lottery.
I'm not saying it is impossible to do it , I'm saying it is very, very difficult. Among retail traders there is probably more money being made by selling worthless product and trading courses to gullible people who think it is easy or/and they are smarter than everyone else. The same way as almost every man thinks he is better than average driver - how can you be better than average driver when below average drivers don't exist? At the beginning I was thinking exactly the same. I have spend a bit of time for education, read some clever articles about money management, trading discipline, trading psychology, reasons why people lose money trading and I thought it would immediately put me ahead of others. Today I understand how wrong I was.
I will say again, it is possible to put odds in your favour and make money in the market, however, required amount of work, time and energy is enormous and it can be compared with getting degree. Anyone who expresses different opinion is either delusional or has self-interests in doing so (e.g. brokers and trading "educators"). And that is why I think encouraging average Joe just to jump it is irresponsible.
I highly recommend watching two short youtube videos by people with credentials:
1. "Making Money in the Stock Market: What makes a Good Trader" - by surprisingly honest former broker (don't miss his last sentence).
2. "Do some Traders have the Gift of Intuition?" - by London City trader
Both are on UKspreadbetting channel.
I agree almost completely, the only thing that I disagree with is the notion that it is very very difficult to be profitable. In part for the same reasons you say it is very difficult, I say it's not that hard although nothing that is good comes easy either. Consider the fact how many traders are unsuccessful and believe they can consistently predict the market, it is quite a large percentage indeed. Now if it truly is a zero-sum game, then the only thing you need to do to be profitable is to do the opposite, right? Don't try to predict the market, you can take neutral positions with well defined risk that profit from the passage of time instead for example if that is your thing. Your counterparty will likely be someone who wants to either speculate or buy insurance/hedge.
It is true that there are no free lunches and nobody in their right mind would give away a profitable strategy for free, but the time it takes to educate yourself with the necessary basics is much less today than it was some years ago, thanks to modern (free) software that does are the math related computational work for you when it comes to probabilities and the wealth of information available on the internet. How is it even possible to calculate something like probability of profit? Well exactly because the markets are very close to 100% random. Everyone still has to find their own little niche that gives them the competitive advantage on their own, which is the hardest part in my opinion.
While I do believe it definitely isn't in the best interest for everyone to manage their money/savings on their own (some people just aren't built for it), I still think it's a good skill to learn for most people rather than let someone else manage that money for a (most often) hefty fee over years. Not necessarily because they would be the better than average driver, but because I for one would definitely rather be behind the wheel myself when driving in hazardous weather rather than pay someone else drive the car that I own remotely (they assume no risk from a car crash, only reward). Especially when you remind yourself how terribly those so called professional money managers (or remote drivers in this analogy) perform. We have had studies where monkeys and cats outperform experts, so all there is to do is to find a different approach to the market compared to what the vast majority is doing (and performing terribly at it).
If you think about the fact that the majority of the professional financial world can perform so bad and keep doing the same exact thing year after year earning millions, it kind of gives the edge to the retail investor who realizes a) how bad it is to give their money for someone else to manage and b) that they have to do something different than all the under performers, not try to beat them in the same game that leads to inferior results in most cases even if you spent your whole youth getting a business degree.
Only when people stop giving away their money to horribly performing 'professionals' for crazy fees thinking they are making great deals will we start seeing good opportunities for the average Joe to have their savings managed by someone else. That is why everyone should learn at least a little bit more about the markets, it should lead to benefits for the whole community.
If the markets are efficient and therefore random, it also means there are people who believe it to be inefficient and employ strategies that try to take advantage of these perceived inefficiencies. If you can figure out what these people are doing, then you can play the 'efficient and random market' strategy which should lead to superior results over time. It isn't as easy as I may make it sound, but due to the sheer number of people believing that the markets aren't random (with a very small upside skew), it isn't too hard to pull off either in my opinion. No get rich fast schemes out there for the average Joe, but superior results compared to passive investing if you spend some time educating yourself? I do believe so.
In the end, it is the very same human nature which leads to losses that allows for there to be something of which to take profit from, you just need to think more like a machine.
+Eivitussaole I agree, actively managed funds are rip off. The fact that so many people still use them proves their lack of awareness. For average person probably the best solution is to buy stock index (as long as they don't do it at historical highs) and apply buy and hold strategy.
+Raf Zas I'm unsure of how it's a zero-sum game. Could you explain?
If a company issues shares at an IPO to raise funds for their business and I buy their stock at $20 and sell it at $40, that implies that their firm value has increased by $20 per share and I've myself made $20 from the trade. It's a win-win for both.
Pretty much saying about nothing the whole time. Two words risk taking, but nothing else knowledgeable
Waste of time, 17 minutes of how great tho art, with No relevant content.
Passive investing is superior because of low cost and the discipline with asset allocation
John C Bogle the creater of the first index fund and Vanguard group. Enough said
Wow. He just stated ( 11:20 )that since he sucks at investing, he quite investing and created a platform for other people to lose THEIR money. Screw this guy.
Quinton Hamp that’s how you actually make money day trading lol
Tom was a an option trader in the Chicago board of trade for 20 years. He made enough money trading that he was able to spent millions of dollars creating a fantastic software like thinkorswim. What do you mean he did not succeed?
Squeezing someone for 500 bucks when you are a millionaire is freaking selfish!!!!!
He shouldn't be proud of it.
Financial education and taking risks are important but being a jerk is not part of it.
The salesman learnt a lesson worth way more than $500. Moreover, it isn't his loss - it's the owner of his dealership.
Eddycurrents true, not only that but the next 10people to walk in that place probably more than made up for it
Never have any empathy for car salesmen. They rape little old ladies for thousands and brag about it.
There was no loss. If they were losing money they would not have sold it. Think about what "squeeze" actually means.
He didnt squeeze a thg, he made an offer, and the salesman accepted it. that was a fair deal. Why millionaire shouldnt negotiate for 500 off? The face value of 500 is equal for everyone, and as far as i know, most of the millionaire get wealthy cause they save, invest and compound.
Am I the only one who missed the point at which Mr. Sosnoff ACTUALLY EXPLAINED exactly how to "fix" the suposedly "broken" passive investing?
If his "message" was simply to take risks when making investment decisions, and espousing the old saw regarding the potential "risk vs. reward" advantages...I just allowed him to waste over seventeen minutes of my most valuable possession - TIME REMAINING IN MY LIFE! - which is something that I will never recover/regain. Even WORSE than that, he did so in an insipidly boring fashion. Talk about adding insult to injury. Oh well, I should have expected it, I absolutely hated Chicago within the first five minutes of my arrival on my first ever visit to that shittiest of cities in the U.S., in 1982. I lasted three days before deciding that I'd rather die a slow horrible death than to spend one more minute in that hole. I've never returned (and never will), and consider it the worst weekend I've ever experienced in my life that didn't involve the death of a friend or family member. What made it such a horrendous place - the people - every, single one of them that I encountered during those three days, without exception. I was completely and totally nonplussed! Detroit, Miami, New York, Jersey City, Flint, Dallas, San Diego, L.A., Atlanta, San Francisco, Houston, New Orleans, Little Rock, Memphis, Las Vegas, Phoenix, Denver, Seattle, Portland, Kansas City, St. Louis, Cincinati, Pittsburgh, Louisville...you name it. Every single one of them seemed like a model, or haven, of hospitality in comparison.
Thanks, SOOOoooo MUCH oh great learned one!!
Brilliant. This prob went over 80% of people's heads
????????
Passive investment, when done properly, is always better! Very few people can do better.
What I gather is that this guy made his money as an entrepreneur. But he really is a bad investor. Two very different things. 🤦♂️🤦♂️🤦♂️
The talk didn't do justice to 'think or swim'.
If you understood what think or swim was you would appreciate the talk just a little bit more.
Rambling. Incoherent. Pointless.
out of topic though
This was awful
Hes not talking about Index Investing, hes talking about passively saving Money.
Over the long term , index funds work, mutual funds don't ! The numbers bear this out! Anything else is sales. Read" Where are all the cusomers' yachts"!
Full of sound and fury signifying nothing
Just like your sentence
GAMBLOR
Google "Tastytrade" "shill" "sosnoff" for a, shall we say...."interesting" article called "A Shill with Skills" (you could google that in quotes as well)...and I happen to agree with the article. :).
" ... I happen to agree with the article." That's too bad as you're missing out on the value tastytrade provides (for free).
Yet another talk claiming that "investing" or brokering is the same as working, or producing something useful. It isn't, and never was. People who create real wealth MAKE things, DESIGN things, or offer a useful SERVICE to others.
hn
I regret TED’s started to waste more and more of my time with useless talks like this.
He couldnt be more wrong up until at least 2020
He says that but owns the trading company and derives income from it.... When your income depends on people making as many trades as possible, you will send this message out. In his mind, it's acceptable because he believes it. If he were really active investor why doesn't he post his trades WITH the historical result of his trades? This is already a red flag. He believes what he says but he doesn't have the results to show for it. I spent 2 years trading the tasty trade way. I made more money holding an index fund because of low costs and the upwards trend of the market over long periods of time. Passive investing isn't broken. If it were broken nobody would hold assets or businesses. He himself owns his own company why doesn't he trade it off? Why doesn't he continue his work on the market floor? Walk the walk Sosnoff. The only reason he hasn't been called out for his ludicrous assertion is he knows how to sound smart with lots of jargon. Buffett still richer than you Sosnoff and made more money than you. Deal with it, with all due respect.
Damn, I had heard Sam Kinison was dead...
Lmao 🤣 🤣🤣😂🤣 you sir deserve a medal !!!
No knowledge sharing here in this talk guys. Just a long winded humblebrag.
Worst tedex talk for me
Well. That was jejune.
Take this off the internet. It is a waste of time
He doesn't say anything. This all seems like an advertisement for his new company.
Summary: "I failed 19 times over 20 years, then one investment I made was bought by Ameritrade and now I'm rich! That's risk baby!
Also, even though I'm super rich from that stroke of luck, I still like to force commission salesmen to sell cars for $500 less than their minimum for kicks.
Shill for Tastyworks
This is very dangerous advice. Follow warren buffets advice, learn from other peoples mistakes so you dont have to make them. Rule number one, always protect your capital. and rule number two, dont forget rule number one.
simon gebremeskel
🤦♂️ Warren himself sells put options on companies he likes which is the same thing this guy does
He's a trading addict, who gets people excited about making loads of zero edge trades to generate volume for his brokerage Tastyworks.
Get Better
Tim Allens put on some weight
Man, the quality of Ted talks has gone downhill. What’s this rambling incoherent mess? I’ve heard better at my Toastmasters club.
It's TEDx...
Pointless.
Veel kaas