It is plausible that a few LessWrong readers have information which would let them create a portfolio which would, on average, perform better than the market. For the large majority of us, though, knowing about overconfidence bias and the law of large numbers should be enough to convince us that putting most of our savings in an index fund is a good idea.
Although everything in this comment seems correct, it also seems to be missing the point a bit. Not all investment is equity. Any of us might be in a position to notice an asset is considerably undervalued.
The old saw about two economists seeing a $50 on the ground and dismissing it as impossible since if it were, someone would have picked it up, is illustrative in this case. The underlying point is broadly correct, since you don’t often see fifties lying in the street, but when you do actually see $50 in the street, you don’t just leave it there. Sticking with this analogy, by my reading, the OP is suggesting that LW readers go down some unusual streets without a lot of foot traffic, where stray fifties might not have had the chance to be picked up.
It is plausible that a few LessWrong readers have information which would let them create a portfolio which would, on average, perform better than the market. For the large majority of us, though, knowing about overconfidence bias and the law of large numbers should be enough to convince us that putting most of our savings in an index fund is a good idea.
Although everything in this comment seems correct, it also seems to be missing the point a bit. Not all investment is equity. Any of us might be in a position to notice an asset is considerably undervalued.
The old saw about two economists seeing a $50 on the ground and dismissing it as impossible since if it were, someone would have picked it up, is illustrative in this case. The underlying point is broadly correct, since you don’t often see fifties lying in the street, but when you do actually see $50 in the street, you don’t just leave it there. Sticking with this analogy, by my reading, the OP is suggesting that LW readers go down some unusual streets without a lot of foot traffic, where stray fifties might not have had the chance to be picked up.