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#3972·Dennis Hackethal, 4 days ago…often they are dealing with larger sums of money, which can make it harder to make higher returns…
Why is it harder to make higher returns for larger sums?
Dealing in larger sums means you have to make big trades to building meaningful positions. Moving large money in, around, and out of the market takes time and needs to be done carefully (so that the price doesn't get away from you). Small investors can build proportionally large positions much easier.
It is like piloting an oil tanker vs a speed boat.
#3972·Dennis Hackethal, 4 days ago…often they are dealing with larger sums of money, which can make it harder to make higher returns…
Why is it harder to make higher returns for larger sums?
Dealing with larger sums of money narrows your investable universe.
As an example, Berkshire Hathaway has an investable universe of only a few hundred companies. Everything else is too small to move the needle for them.
There are many great opportunities available only to smaller investors.
#3967·Zelalem Mekonnen, 5 days agoBecause these barriers exist, the company does not have to constantly reinvent its core model to survive.
This sentence makes an opposite point if it stopped at "does not have to constantly reinvent," meaning economic moat is slowing down error correction.
Do you mean error correction within the company or at the level of the economy?
#3965·Zelalem Mekonnen, 5 days agoMarkets are also mostly based on knowledge from the outside. If you invest based on internal knowledge, that will be called insider trading (not making a moral judgement whether insider trading is good or bad).
Yes, but I think it is largely the interpretation of information that matters.
Different people respond very differently to the same information.
The sentiment of the sentence stands. Even with uncomputable functions, one shouldn't waste time in trying to solve them.
The sentiment of the sentence stands. Even with uncomputable functions, one shouldn't waste time in trying to solve them.
#3973·Dennis Hackethal, 4 days agoBy definition, there is nothing in the unknowable, since it can't be known.
This isn’t true. There are unknowable things. Look up uncomputable functions, see eg
- https://en.wikipedia.org/wiki/Computable_function#Uncomputable_functions_and_unsolvable_problems
- https://www.reddit.com/r/compsci/comments/2s2wgy/what_is_an_uncomputable_function/.
So there are things that computers like our brains can never access – there are fundamental, natural limitations.
In this context, I think of mysticism as restricting criticism and preventing error correction, ie creating a man-made barrier for reason. That’s different.
The sentiment of the sentence stands. Even with uncomputable functions, one shouldn't waste time in trying to solve them.
#3975·Dennis HackethalOP, 4 days agoShould not autopair behind a word character.
Steps to reproduce:
- Type 'foo'.
- With the cursor behind the second 'o', hit single quote:
'.- The text now reads
foo''but should only readfoo'.After a non-word character (eg linebreak, period, colon, semicolon etc) though, it should still autopair.
Fixed as of bbcefa8.
Should not autopair behind a word character.
Steps to reproduce:
- Type 'foo'.
- With the cursor behind the second 'o', hit single quote:
'. - The text now reads
foo''but should only readfoo'.
After a non-word character (eg linebreak, period, colon, semicolon etc) though, it should still autopair.
Undo/redo stack should preserve cursor position.
Steps to reproduce:
- Start with empty textarea.
- Type '('.
- Cursor is now inside '(|)'.
- Hit undo.
- Hit redo.
- Cursor is now behind '()|' but should be inside like in step 3.
Issue tracker for the autopairing + typethrough package at https://github.com/dchacke/autopair.js
#3968·Zelalem MekonnenOP, 5 days agoBy definition, there is nothing in the unknowable, since it can't be known. One can rationally and with confidence move on and not even entertain anything that claims to be 'beyond human understanding.'
By definition, there is nothing in the unknowable, since it can't be known.
This isn’t true. There are unknowable things. Look up uncomputable functions, see eg
- https://en.wikipedia.org/wiki/Computable_function#Uncomputable_functions_and_unsolvable_problems
- https://www.reddit.com/r/compsci/comments/2s2wgy/what_is_an_uncomputable_function/.
So there are things that computers like our brains can never access – there are fundamental, natural limitations.
In this context, I think of mysticism as restricting criticism and preventing error correction, ie creating a man-made barrier for reason. That’s different.
#3960·Benjamin DaviesOP, 5 days agoMoney is worth more today than in the future. We would all rather have $1,000 today than $1,000 in a year's time.
But how much more valuable is money now vs a year from now? Would you take $1000 now or $1100 a year from now?
Deciding what rate of return is acceptable to you is important for determining the rough degree of effort that will be required and what kinds of investments are worth pursuing. Someone trying to make 4%+ per year on their money has a much simpler task than someone trying to make 18%+.
Your answer will depend on what you are trying to achieve and what opportunities and knowledge you possess. Most prominent value investors want a minimum 10% return per year (often they are dealing with larger sums of money, which can make it harder to make higher returns).
This desired rate is what is used as the 'discount rate' when making a 'discounted cashflow' valuation of an asset.
My discount rate is 15%, as my goal is to make 15%+ per year in perpetuity.
…often they are dealing with larger sums of money, which can make it harder to make higher returns…
Why is it harder to make higher returns for larger sums?
Dennis Hackethal updated discussion ‘Finance and Investing’.
The ‘About’ section changed as follows:
A discussion about making money in financial markets.
A discussion about making money in financial markets. Nothing in this discussion should be taken as financial advice.
Per my current employment contract, my work hour is flexible. So I am looking for additional work. I cleaned up my resume and would love all criticisms and suggestions.
"Man simply invented God in order not to kill himself, that is the summary of universal history down to the moment."
"Man simply invented God in order not to kill himself, that is the summary of universal history down to the moment."
Dostoevsky
"Man simply invented God in order not to kill himself, that is the summary of universal history down to the moment."
By definition, there is nothing in the unknowable, since it can't be known. One can rationally and with confidence move on and not even entertain anything that claims to be 'beyond human understanding.'
Zelalem Mekonnen updated discussion ‘Known, unknown and unknowable’.
The title changed from ‘Known, unknown and unknowable’ to ‘Known, Unknown and Unknowable’.
When it comes to knowledge, there are three categories. Things we know, things we don't know, and things that are unknowable.
Religion and mysticism can come from confusing the unknown with the unknowable.
Religion can provide a protection against the reality of facing the unknown, which is the only way to create knowledge.
#3964·Benjamin DaviesOP, 5 days agoAn economic moat is a structural barrier that allows a business to resist the natural forces of competition. In a standard market, high profits act as a signal for other companies to enter, replicate products, and drive prices down—a process that eventually erodes a company's ability to generate wealth. A moat interrupts this cycle by making it difficult or expensive for competitors to take market share, enabling the business to perpetuate its earnings and survive far into the future.Because these barriers exist, the company does not have to constantly reinvent its core model to survive. Instead, it can rely on its established position to maintain a steady output of value. This structural durability makes the business's long-term trajectory more stable and less prone to the sudden decay that typical firms face when a new rival appears.
One of the most enduring forms of a moat is Brand Power, where a name creates such high consumer trust or habit that people are unwilling to switch to a cheaper alternative. Coca-Cola provides a classic example of this; it has spent over a century building a brand that occupies a unique "real estate" in the consumer's mind, allowing it to sell what is essentially a commodity with much higher margins than generic competitors. Similarly, Scale and Cost Advantages occur when a company grows so large that it can deliver services at a cost that smaller rivals simply cannot match. Amazon utilises its massive logistics network and volume to offer prices and delivery speeds that would be financially ruinous for a smaller retailer to attempt.
Other businesses perpetuate themselves through Network Effects, where a service becomes more valuable as more people use it. Instagram is a prime example of this dynamic; the platform's primary value to a user is the presence of their friends and family, which means a new competitor cannot simply offer a better interface to win—they would need to move the entire social circle simultaneously. This is often paired with High Switching Costs, which make it too painful for a customer to move to a competitor. Apple provides a masterclass in this with its "walled garden," an ecosystem where its hardware, software, and services (like iMessage, iCloud, and the App Store) are designed to work harmoniously together but intentionally difficult to use with outside devices. Once a user has invested in the apps, storage, and accessories within this garden, the cost of leaving—not just in money, but in time and frustration—creates a barrier that preserves the company's customer base. Each of these moats serves to insulate the business from the "mean reversion" that typically forces profits toward zero, making the long-term outcome of the business more a matter of its internal nature than of market dynamics.
Because these barriers exist, the company does not have to constantly reinvent its core model to survive.
This sentence makes an opposite point if it stopped at "does not have to constantly reinvent," meaning economic moat is slowing down error correction.
#3963·Benjamin DaviesOP, 5 days agoI don't like shorting.
When you buy a stock, the most you can lose is 100% of your investment, but your potential gain is infinite. When you short a stock, your maximum profit is capped at 100% (if the company goes bankrupt), but your potential loss is mathematically infinite because there is no limit to how high a stock price can climb. This creates a "bad bet" where you risk everything for a relatively small reward.
Shorting is also a battle against time. To succeed, you must be right about a company’s failure and the exact timing of the market's reaction, all while paying interest on the shares you borrowed. Instead of fighting the natural upward trend of human progress and productivity, it is far more rational to invest in "compounding machines"—high-quality businesses that grow in value over the long term. This allows time to work in your favor rather than against you.
Is shorting be a mechanism of error correction?
I've also noticed incumbent advantage in business. Unless a competitor offers a better product, a company can be as corrupt and evil as possible.
#3962·Benjamin DaviesOP, 5 days agoMarkets are made up of fallible people and are often wrong, sometimes wildly wrong about what an asset is worth. A good investment often involves reading the situation better than other market participants and going against the tide.
Markets are also mostly based on knowledge from the outside. If you invest based on internal knowledge, that will be called insider trading (not making a moral judgement whether insider trading is good or bad).
An economic moat is a structural barrier that allows a business to resist the natural forces of competition. In a standard market, high profits act as a signal for other companies to enter, replicate products, and drive prices down—a process that eventually erodes a company's ability to generate wealth. A moat interrupts this cycle by making it difficult or expensive for competitors to take market share, enabling the business to perpetuate its earnings and survive far into the future.Because these barriers exist, the company does not have to constantly reinvent its core model to survive. Instead, it can rely on its established position to maintain a steady output of value. This structural durability makes the business's long-term trajectory more stable and less prone to the sudden decay that typical firms face when a new rival appears.
One of the most enduring forms of a moat is Brand Power, where a name creates such high consumer trust or habit that people are unwilling to switch to a cheaper alternative. Coca-Cola provides a classic example of this; it has spent over a century building a brand that occupies a unique "real estate" in the consumer's mind, allowing it to sell what is essentially a commodity with much higher margins than generic competitors. Similarly, Scale and Cost Advantages occur when a company grows so large that it can deliver services at a cost that smaller rivals simply cannot match. Amazon utilises its massive logistics network and volume to offer prices and delivery speeds that would be financially ruinous for a smaller retailer to attempt.
Other businesses perpetuate themselves through Network Effects, where a service becomes more valuable as more people use it. Instagram is a prime example of this dynamic; the platform's primary value to a user is the presence of their friends and family, which means a new competitor cannot simply offer a better interface to win—they would need to move the entire social circle simultaneously. This is often paired with High Switching Costs, which make it too painful for a customer to move to a competitor. Apple provides a masterclass in this with its "walled garden," an ecosystem where its hardware, software, and services (like iMessage, iCloud, and the App Store) are designed to work harmoniously together but intentionally difficult to use with outside devices. Once a user has invested in the apps, storage, and accessories within this garden, the cost of leaving—not just in money, but in time and frustration—creates a barrier that preserves the company's customer base. Each of these moats serves to insulate the business from the "mean reversion" that typically forces profits toward zero, making the long-term outcome of the business more a matter of its internal nature than of market dynamics.
I don't like shorting.
When you buy a stock, the most you can lose is 100% of your investment, but your potential gain is infinite. When you short a stock, your maximum profit is capped at 100% (if the company goes bankrupt), but your potential loss is mathematically infinite because there is no limit to how high a stock price can climb. This creates a "bad bet" where you risk everything for a relatively small reward.
Shorting is also a battle against time. To succeed, you must be right about a company’s failure and the exact timing of the market's reaction, all while paying interest on the shares you borrowed. Instead of fighting the natural upward trend of human progress and productivity, it is far more rational to invest in "compounding machines"—high-quality businesses that grow in value over the long term. This allows time to work in your favor rather than against you.