nopie
1yr ago
They wouldn't do that because it would be so obvious conflict of interest that the outrage would follow and the government would simply shut the company or fined them billions.
We have done this to companies for much smaller conflicts of interests. For example, the company that misleadingly advertised opioids as non-addictive got liquidated (https://en.wikipedia.org/wiki/Purdue_Pharma).
nopie
1yr ago
It's part of the risk.
The point is that he was right that things are going to get ugly and was not just lucky. Whether he succeeded to make money on that or not, is immaterial.
The whole discussion I started is also not about how one can become rich. It is about the maximum benefit for the society. I believe stock market is very beneficial for all of us but sometimes it fails and we should make a system that reduces failures.
nopie
1yr ago
That's why we need EMH to protect people from making simple mistakes like that. :)
Eli Lily can and will make good money on tirzepatide but it is a big company with tens of different drugs on the market. Some of them will be unprofitable which makes it hard to predict the final stock price of this company.
Also, it doubtful that it will make a noticeable dent in McDonald's profits. McDonald's is not the only fast food chain. People buy food in supermarkets too and throw out about half of it for whatever reason. It is very hard to predict what impact the appetite loss in a number of fat people will have.
nopie
1yr ago
That still is not utilization. My sources are the BMJ. I am too lazy now to search for the article I had read before but the quick search sent me an article that it had decreased by a third, so I am not sure which data is more trustable.
The rebounding after 1-2 months of depression is simply not believable. We had unexplained excess mortality of 10-15% in December 2022 which was neither due to vaccines, nor covid (despite panicking voices on both sides). In medicine we don't just look at test results to make diagnosis. We have to corelate to what we observe in patient, all manifestations and functions. And we have to admit what we don't know.
It may be fully possible that the measures introduced to limit covid exposure increased actual spending while utilization remained below the normal.
I can now better understand why 2008 crisis caught so many unprepared. That was the belief in reported numbers that everything is fine. It took a doctor to actually look behind those numbers and see what is going on in the field.
nopie
1yr ago
I was in Spain and it definitely hadn't recovered in 2021. The amount of people on streets were visually lower.
Healthcare utilization in the UK during covid was 80% of normal. That is one of the most contra-intuitive things because most people believe that healthcare was totally overwhelmed during pandemic. Well, some places were but in general the income of healthcare workers took a hit.
However, the amount of money we spent on vaccines that later were thrown out were unusually high. That means that other needs did not get financed sufficiently. The distortions are quite clear and apparent in every sector where I look.
nopie
1yr ago
This data does not show this. Even if the expenditure increased but it could be the case that it went to wrong sectors of the economy.
nopie
1yr ago
I am not sure I believe that. The reason of the crash and everything that followed was solely due to the government's mistaken actions. I don't know specifically about the US, but the life in 2021 was far from normal and it was also solely due to the government's mistaken actions. It would be strange if it had no deleterious effect on the economy.
The government was trying to whitewash the negative effects on people.
nopie
1yr ago
No, the overreaction to the pandemic was a terrible risk management, instead of understanding it and acting contrary to the government's recommendations during this time. The same probably applies to the activities in the market during times when you clearly see the world being collectively afflicted by wrong decisions.
nopie
1yr ago
You are missing the main reason why the stimulus was too much this time. It was simply because the government acted in contradictory ways and prevented people spending money. The fact that different restrictions continued after most elderly had received vaccine was the biggest unforced error.
nopie
1yr ago
Should you yolo your life savings in the next time there’s an event like COVID where you think the market is wrong?
It is impossible to tell. The next time when we get a pandemic, it will not be the same as COVID. We don't know if it will be the case when people get overreact or the case when the risk ir real and measures like lockdowns and travel restrictions are effective and need to be implemented. We don't even know whether markets will be so wrong then.
But the idea is that everybody knows something that other people don't. Sometimes it gives you opportunity to make better bets on the stock market. Should you use this opportunity? EMH says that we shouldn't because the current price already includes the publicly available information that you have but other people don't.
nopie
1yr ago
Well, I had read Krugman's “End This Depression Now” explaining why stimulus in certain conditions is needed. I read the book because I was going through personally depressive period in my life but the book had some insights anyway. Krugman was proven right with sufficient evidence that I was surprised that so many experts still disagreed with him and demanded austerity policies instead. Nevertheless, even the staunchest critics have to admit that stimulus worked better during economic contraction, so it was no-brainer that the governments faced with economic contraction during covid pandemic would try to use stimulus too. I didn't believe that it will be very effective because unlike normal conditions people were prevented from spending money. The government had little choice though because they had to make sure that people who were forced out of work by their policies can still pay rent, buy food etc.
Incidentally, the lack of spending opportunities also gave me chance to invest some money. I expected that other people would do the same and it seems that eventually they did. But when I saw stock market taking a dive, it made no sense. I didn't expect to make a quick profit, I thought that recovery would take longer time. I believed that eventually everybody would get covid and then all the restrictions will be shown useless. Even the most totalitarian governments would have to admit that their policies are futile. Once restrictions are gone, people would quickly restart economic activities and stock market would rise.
Scott wrote that the stock market dive actually happened due to automatic selling. Many funds set automatic scripts to sell when the price reaches certain low threshold to prevent from further losses. Selling moved the price even lower with more and more funds initiating automatic selling.
nopie
1yr ago
I don't need the EMH to avoid doing things that are clearly reckless and most likely leading to ruin. But apparently many people need something that is softer on their ego. Instead of saying to them – don't overestimate your ideas, you probably know less whether the potential investment opportunities are good deals or not – we have to tell them soft lies about the EMH. It is like saying that you are a genius instead of an idiot but other investors are geniuses too and they have already cornered the market so you have very little chance to be the first. :)
Comparison with gas in a chamber is really strange. Avogadro number (the number of molecules in 1 mole) is 6×10^23 and that amount of gas will occupy about 22 Liters. The number of humans is no more than 10^10. We definitely cannot use gas example to provide intuitive understanding about markets.
nopie
1yr ago
That precisely is my understanding too. But why not play the market with the same attitude in every case? I saw a big issue of market going into the wrong direction without being an expert in this because it was so obvious. But many people are experts and they know about about multiple smaller cases where it makes sense to invest with smaller but sufficiently good returns. The fact that they help to correct the market and bring it back to equilibrium just means that you need to be an expert. Why make a theory that basically says – if you are not an expert, don't pay in the market and simply invest in index funds?
Just a thought: maybe investing has attracted too many non-experts that it becomes like a mass delusion that they all believe that they know how to beat a market and we need some warning for those people?
nopie
1yr ago
Isn't the point of markets to help to allocate capital by transferring risk?
nopie
1yr ago
When I learned that US embassy workers were having unexplained brain damage, many people ascribed that to “sonic weapons” from unknown attackers. The most likely explanation however was that it is probably coincidence and more likely it was mass psychogenic illness. This Havana syndrome is still unresolved but if there was a way to bet on this, the correct way would be to bet against sonic weapons.
Now, if the governments in many countries would wrongly become convinced that it was sonic weapon, it would seem that you lose the bet. But eventually the truth comes out and the bet against sonic weapons has much higher chance to be right.
Covid was something similar to this. When due to human nature collectively we have markets going into wrong direction, you may or may not be able to profit from it but in any case you need to take stance and try to correct the delusion that is harming all of us. If you can it directly by placing winning bets, that's preferrable because it might help other people to realize sooner that their thinking is faulty. Granted such cases are rare, or non-existent for most people.
nopie
1yr ago
I see in this way. Yudkowsky and markets were right that we shouldn't have trashed economy over covid. That the governments of many countries did it anyway just shows unpredictable human nature. The experts who had actual expertise in dealing with pandemics in different settings were clearly against such widespread restrictions. At some point they were sidestepped and the panicking “the-sky-is-falling” guys took over and the rest is history. The winners were those who kept cool. Even after the crash the markets recovered nicely.
My thought is not about how one can become rich by playing market but what is the added value from market players. I understand that it indirectly helps to allocate capital to more efficient industries. If market collectively goes into the wrong direction, we need contrarians who can see it clearly and help to make necessary corrections.
The EMH just says that there are enough such contrarians already, so you don't have to worry. Which to me sounds very strange. It is like saying that no one should bother inventing a new drug because there are already many pharma companies doing that and their success rate is very low.
nopie
1yr ago
Wouldn't meme stocks be a case of market manipulation, except that it is not done by a one person or a coordinated group of persons but by a more loosely group?
The problem of "normal" conditions is that you cannot define them in advance.
nopie
1yr ago
Nobody is perfect. He needs to maintain his brand with his substack and some of these discussions can damage it.
I am being charitable to him and assume that he doesn't denounce lockdown restrictions only because he cannot without damage to his reputation. It is the same Kolgomorov's complicity he wrote about.
I can put my bets that the public is volatile. Crowds that demanded that everyone stays at home, will soon demand for blood of those who issued these orders. But I have nothing to lose if my bets do not work out. For him it is much more riskier. And he can join the crowd too when it demands blood.
nopie
1yr ago
That is actually very common. Most people who want to discredit conspiracy theorists actually know very little about the subject and the conspiracy theorist actually knows a great deal more (albeit often with his own bias that misleads him). When starting dialog, the discreditors are quickly faced with a failure which they don't want to accept and simply start mocking the opponent.
I already said in another place that I totally support Scott on his stance to write a long and detailed rebuttal. Maybe his choice about ivermectin wasn't the most interesting to majority but people write detailed PhD theses about more boring subjects and learn a great deal about many things. Who am I to say which subjects one should engage to and which are not allowed?
nopie
1yr ago
No, it is not like bananas at all. Some hospital are ending the policy of requiring masks already.
With the treatment for psoriasis, I meant topical treatment in this case.
nopie
1yr ago
The likelihood of risk from black bean extract may be lower but not entirely zero. The medicine indicated for psoriasis have high chance of benefit, therefore some potential of harm is usually accepted. But if you don't know if the treatment has any effect, then even small harms are unnecessary.
And it is not a right way to think that black bean extract cannot harm because people have used them in food for so long. The mucosal immunity in the gut works differently from the one on the skin, so we cannot exclude that it is can harm the skin. Yesterday, I got a warning from oculist to not recommend chamomile extract for washing eyes because it can cause allergies in some people. Chamomile tea is fine and people have used chamomile extract to clean eyes for long time as well and yet it probably does nothing and can harm.
Psoriasis patient is not the same as a healthy person. We don't know how he/she would react to untested treatment. The fact that it is plant derived means little because many modern medicines are originally derived from plants. Even antibiotics came from moulds.
Masks can harm, in the UK there was a case when doctors misheard each other due to masks distorting speech and overdosed medicine and patient died. If the benefit of masks is not proven, such harms are unacceptable.
What do you mean by Down syndrome is tolerated? We do screen all pregnancies for Down syndrome and terminate pregnancy in case of positive test. Sometimes the screening test is not done or the test fails but those are exceptions and not the norm.
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