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Todays derivatives and their pricing are based on the premise that stock prices can not be predicted and behave like a Brownian motion system. If you take real time data from any stock and calculate in order how many times a stock went up in a row or down in a row you end up almost perfectly with a natural probability distribution. HFT's are involved in market making and arbitrage both of which already involves high speed, the later much more, and earning minuscule profits. There are ghost patterns who can be mined for a certain period of time but they are not solely calculated based on trading time series. They involve complex proprietary calculations, some machine learning and relationships between stocks. There is no pattern in the flow how a particular stock is trading.

Also from a long-term view its very questionable. How should a model be able to predict that in the middle of a high interest environment, a tech bubble burst and a dumping stock market in general, a new platform called Chat-GPT gets launched that basically carries the whole world's stock market to new heights which causes among other things retail investors to liquidate bonds and other high interest environment assets and flood it into the stock market. It is more than completely of the text-book. That can not be predicted. The million dollar spending guy is at the end the same way off as the guy who simply employs a 100 python line trend-following strategy.


> How should a model be able to predict that in the middle of a high interest environment, a tech bubble burst and a dumping stock market in general, a new platform called Chat-GPT gets launched that basically carries the whole world's stock market to new heights which causes among other things retail investors to liquidate bonds and other high interest environment assets and flood it into the stock market.

Because it happened in the railroad boom in the 19th century, the roaring 20s, the 80s, the 90s dot com boom, the biotech boom...

History rhymes, and as we know, LLMs make decent rappers.


Derivatives are priced under those assumptions because the aim is to calculate exposure/risk (where simple / assume you're wrong is desirable), the pricing is sort of an afterthought most of the time.


The tech is different but the people are the same.


Very interesting project, I like the overview. I also really like that you took the finance industry as a theme for your project.

>> Every company in the United States

Sorry for being so fussy but I highly recommended changing the word 'company' / not using it in the future, as the title is quite misleading. No private company in the US has to register with the SEC or has to file with the SEC. 'Investment advisors', who also go by other aliases like 'asset manager', have to file a 13F filing only if they a) are registered with the SEC due to fund marketing purposes and b) if they have, as you already mentioned, over $100 million dollars under management (not 'in holdings'). This is also why large family offices (.e.g. Bayshore Global Management of Sergey Brin) won't show up in any SEC records as they meet the second but not the first criteria - same goes pretty much for any non asset-management company (e.g. McDonald's) as they do not raise money for fund vehicles. However, you have take this into account on your website, and further below you wrote "money manager" which is correct in finance jargon.

I hope this gives you a better understanding, keep up the great work.


I think that’s not entirely correct either, for example Nvidia had to file a 13F for its holdings after their value of ARM shares exceeded 100M. And the requirement I believe is not for investment advisors (which is its own thing, see Register Investment Advisors from the SEC), but broadly extends to institutional investment managers which is a lot looser of a definition that can certainly include private companies like broker-dealers, in addition to hedge funds, RIC, etc as well as public corporation like Nvidia depending on the types of activities they are involved in.


Good point, I did not mention that. Non-registered investment advisors are also included but this relates more to banks, bank holdings and broker/dealers (e.g. investment banks) who trade on 'investment discretion'[1]. Thus it means entities that are not registered as an investment advisor but still invest on behalf of outside clients and not their own book. This does clearly not apply to Nvidia. It is highly unlikely and not logical that they would manage money for third parties in the name of the public corporate entity, just for a pure side hustle. As that would not contribute much financially (in terms of fees that are earned from managing money on behalf of others) nor to their core business.

The reason for this 13F filing, as you already guessed to some extent, is that Nvidia is a publicly traded company. As such it is subject to a wide range of SEC filings including those from section 13[2].

Nvidia seems to be a rare case. Acquiring public equity, as a company - especially as a public one, just for the purpose of managing concurrent assets, is very unusual but not out of the question - just away from the textbook. Given the fact that its ARM, whose acquisition failed before Nvidia filed the 13F, it could also serve some other purpose, e.g. showing that interest is still present.

[1] https://www.sec.gov/divisions/investment/13ffaq#:~:text=Bank....

[2] https://www.legalandcompliance.com/securities-law/sec-report...


I geniunely did not know that there was a real difference between companies and asset managers. Sorry for the confusion.

Thanks for informing me, and for the kind words, I'll make sure to avoid using the word company from now on.


[flagged]


You crossed into personal attack with this comment. That's not ok, and it looks like you've done it in other places as well (https://news.ycombinator.com/item?id=39245439). Can you please avoid that? It's against the site guidelines and destroys what HN is supposed to be for.

If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.

Btw, saying "I don't mean to be rude." doesn't change this—if that is your intent, then you need to edit your comments so they express your intent unambiguously. More on that here if you want further explanation: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que....


Guess I just missed it. The SEC's search database provides info for companies and money mangers alike, so I wrongly assumed they were the same thing. Sorry.


They’re being rude, I don’t think you have anything to be sorry for. Very cool project, well done!


We live in times were non-problems are turned into problems. Simple responses should be generated truthfully. Truth which is present in today's data. Most software engineers and CEOs are white and male, almost all US rappers are black and male, most childminder and nurses are female from all kinds of races. If you want the person to be of another race or sex, add it to the prompt. If you want a software engineer from Africa in rainbow jeans, add it to the prompt. If you want to add any characteristics that apply to a certain country, add it to the prompt. Nobody would neither expect nor want a white person when prompting about people like Martin Luther King or a black person when prompting about a police officer from China.


is it even true that most software engineers are white and male? We're discarding indian and chinese engineers?


My experience over about 30 years is that 90% of engineers I’ve seen, including applicants, are male and 60% are Asian. I’d estimate I’ve encountered about 5,000 engineers. I wasn’t tallying so this includes whatever bias I have as a North American tech worker.

But most engineers are not white as far as I’ve experienced.


You don't even have to guess, BLS exposes this data to the public, search for "software developer": https://www.bls.gov/cps/cpsaat11.htm


That table gives “or” statistics. You can get the percent males (80%) and the percent whites (55%) but you can’t get the percentage of white males.

In fact given that 45% are not white, if only 6% of software developers are white women that would put white men in the minority.


Great point! In addition, race and ethnicity are different dimensions, so with 6% of developers as Hispanic/Latino, if you're interested in the white non-Hispanic population, that's probably around 52% given about half of Hispanics identify as white.


That is the US only though


Interesting, it says 36% of software developers are Asian but only 9% of web developers.


In which country? It's true in France, it's possibly not true in the US, it's definitely not true in China.


In a recent US job opening for entry level SWE, over 80% of applicants had CS/IT degrees from the Indian subcontinent. /anecdote


Those are "white-adjacent". They're the glitch in the woke matrix.

They're minorities, non-white, yet they perform. Outperform even. This suggests that merit works no matter your background which breaks identity politics.

Hence, successful minorities project "whiteness". This includes awful behavior like punctuality and rationalism.


Certainly not in my Silicon Valley teams.

I'd say maybe 40% white (half of which are immigrants) and 80% male.

More diverse than any leftist activist group I've seen.


Interesting tidbit, but was the political snark at the end really necessary?


Not much is necessary, but it felt on topic because it's arguing against leftist fantasies that SW engineers are all straight white males.


One thing's for sure though, nobody in tech really cares about your race or sexual orientation, they care about your results.

Sure there might be some bias against/for some groups, but everyone knows there's genuses in India and white caucasian flops so they give everyone equal opportunity.

Only exception is for like legal reasons it might be easier to hire some French random low-tier programming over a Russian/Irani genius but that's due to sanctions, but if those same Russian/Irani guys held a western european passport they would gladly just hire them outright.

Source: Venezuelan (sanctions) who is also a holder of a European passport (all sorts of doors just open just because I hold this 2nd nationality out of sheer luck, and you know Venezuelans aren't extremist either).


Eh, that isn't quite true because determining the quality of the "result" is biased by our opinion of its author and, equally important, how they present their results. Race and sexual orientation impact your speech patterns and habits which you very much are judged on.

Additionally, when a woman works with a man on something often the woman's contribution is assumed to be less than the man's contribution if they're listed as co-authors - I would be very surprised if this weren't the case beyond academia but also in artifacts like design docs.


If your first sentence is true, pretty sure we will not be having a Gemini this woke.

If we care about the results, and the model showed an Asian and Black Nazi, then we know it is not really about the results.


how many leftist activist groups have you seen?


> Simple responses should be generated truthfully. Truth which is present in today's data.

Why would you rely on current LLM and -adjacent tech image generation to give you this? The whole point is to be creative and provide useful hallucinations.

We have existing sources that provide accurate and correct info in a deterministic way.


Creative doesn't mean to consequently manipulate output to match a certain ideology.


I'm sure people with this take will be totally happy at the "historically accurate" pictures of Jesus then (he would not have been white and blue eyed)


I would absolutely love if image generators produced more historically accurate pictures of jesus. That would generate a really lovely news cycle and maybe would even nudge modern representations to be a bit more realistic.


I don't think most people care about Jesus's ethnicity, but it seems quite likely that without adjustment he would be rendered as quite white since a lot of imagery and art depict him as such. Or maybe the model would be smart enough to understand if the prompt was for a more historically accurate image or something like the archetype of Jesus.


People in this forum seem to care quite deeply about the ethnicity of AI-generated fictitious randos. So when it comes to actual Jesus, I think you might be mistaken on how much people care.


The iconography of Christ varies greatly all over the world as He is deemed both divine and human. If you walk in any Church you will see His varies depictions and Christians are well aware of this. I am not sure what is the point you are trying to make with this?


I think the parent comment couldn't care less about a white Jesus to be honest, he seems very pragmatic.


This is how Jesus is described in Islam: "I saw Jesus, a man of medium height and moderate complexion inclined to the red and white colors and of lank hair"

Try that prompt in various models (remove the part saying it's Jesus) and see what comes out.


> how Jesus is described in Islam

You seem to be quoting Muhammed's alleged description of Jesus from the Quran [1], per--allegedly--Ibn Abbas [2], a man born over half a century after Jesus died.

[1] http://facweb.furman.edu/~ateipen/islam/BukhariJesusetc.html

[2] https://en.wikipedia.org/wiki/Ibn_Abbas


Presumably you mean the hadith, not the Quran, and half a millennium, not half a century? Regardless, I don't think it makes much of a difference to the point, which is that there's not one "historically accurate" Jesus that you can back out from 21st-century racial politics.


Yes to both errors!


Yes?


I can see why someone would be like wtf if their "viking" input produced less than 90% white people results, but there should be an equal wtf if "CEO" produced 90% men.

One is a historical fact that is never going to change, the other is a job in society where the demographics can and will change --- at least partially as our expectations of what "normal" looks like for that role are updated. By perpetuating the current (or historical) norm for a given role the biases of what person we naturally consider appropriate for that role remain unchallenged.


The debate then is should an AI lie about reality if we tell it to? (Even and particularly when the lie is a good thing)

I think most people on earth would say yes. It's that what it should say is up for debate.

That all AI will lie is probably inevitable because they are made by humans.


> Most software engineers and CEOs are white and male

Fine, you walk up to Sundar Pichai, Satya Nadella, and Lisa Su and say those words. I'll watch.


I imagine their response will be similar to the response you'd get if you told Barack Obama that most US presidents have been white.


What, do you think they will be insulted? Why would they?


Most


Strictly statistically speaking, race is likely a good predictor of credit worthiness in the US. But extending credit based on race is illegal which isn't hugely controversial. The woke ideologists are merely pushing that concept to 11, i.e. that truth must be secondary to their political agenda, but they are only making a grotesque version of something reasonable people typically already accept.


> We live in times were non-problems are turned into problems.

This is exactly what everyone who benefits from the status quo always says.

> Most software engineers and CEOs are white and male

55% of Software Engineers are white; 80% are male.[1] So somewhere around 44% of software engineers are white and male. That's not "most". You think it's perfectly fine if 100% of generated images for "Software Engineer" are white males, when ~56% are not in real life? What exactly is your definition of "truth" here?

An unregulated generative model trained on the entire Internet is not going to regurgitate facts, it's going to regurgitate existing beliefs, which is damaging to people who those existing beliefs harm, and to the people who are trying to change those beliefs to actually align better with facts. It is an amplifier of pre-existing perceptions and prejudices; facts have nothing to do with it, except for when they serendipitously line up with common belief. But common beliefs often don't align with the facts -- yes, even yours, as we discovered when you spouted off that "most software engineers are white male" misinformation as if it was some unarguable fact.

[1] https://www.bls.gov/cps/cpsaat11.htm


>55% of Software Engineers are white; 80% are male.[1] So somewhere around 44% of software engineers are white and male. That's not "most".

Actually, white women are less likely than women of other races to pursue engineering. So there could be closer to 50% white men. Obviously this is in the US. In China, 99.9% of software engineers would be Han Chinese lol. Would it be wrong to show them a group of Chinese engineers? How about showing them 100% non-Chinese when they explicitly ask for Chinese? That's how messed up Gemini is.

Anyway, this is all a stupid argument. Talking about numbers like that in a field as diverse as software engineering is a bad idea, because it has no bearing on the problem. Let the AI generate what it wants to by default, and let people fine-tune to get other ethnicities in there if they want to. If I ask for 5 people with one white, one asian, one black, one Mexican, and one albino, the AI should be able to do that. Focus on correctness and leave judgement to the people consuming the output. I think proportions are only a problem with Gemini because it produces 0% images of white people, even in contexts that demand at least some white presence to not be absurd.

I expect Gemini to still be biased against white people after it's fixed. It will just be more subtle.


Even though this is highly impressive, I think it is still important to stay rational and optimistic to see the other side of the coin.

Every industrial revolution and its resulting automation has brought not only more jobs but also created a more diverse set of jobs. Therefore also new industries are created. History rhymes, the ruling fears in such times have always been similar. Claims are being made but without any reasonable theories, expertise or provable facts (e.g. Goldman Sachs unemployment prediction is absolute bs). This is even more true when such related AI matters are thought about in more detail. Furthermore, even though employing tens of millions of people probably, only a few industries like content creation, movie etc. are affected. The affacted workforce of these industries is highly creative, as they are being paid for their job. The set of jobs today is big, they won't become cleaning staff nor homeless.

This technology has also to proof itself (Its technical potential is unlimited but financially limited by the size of funds being invested, and these are limited)

Transition to the use of such tools in corporations could take years, depending on the type and size and other parameters. People underestimate the inefficiencies that a lot of companies embody - and I am only talking about the US and some parts of Europe here. If a company did their job for 2 decades the same way, a sudden switch does not happen overnight. Affected people have ways to transition to other industries, educate themselves further and much more. Especially as someone living in the west, the opportunities are huge. And in addition, the wide array of different variables about the economy and the earth, and everything its differing societies are, comes into play: Some corporations want real videos made by real people; Some companies want to stay the way they are and compete using their traditional methods; Corporations are still going to hire ad agencies - ad agencies whose workflow his now much more efficient and more open to new creative spheres which benefits both customer and themselves. They list could go one endlessly.

Lots of people seem to fear or think about the alleged sole power OpenAI COULD achieve. But would that be a problem, would "another Alphabet" be a problem? Hundreds of millions of people benefited and are benefiting today from their products. They have products that are reliable and work (This forum consisting of tech experts is a niche case, nearly all people don't care at all if data on them is being used for commercial purposes). Google had a patent guaranteed monopoly on search. But here we have: an almost non patented or patentable market, an open source community, other companies of all sizes competing, innovation happening and much more. It is true that companies like OpenAI have more funds available to spend than others, but such circumstances have always driven competition and innovation. And at the end of the day, customers are still going to use the best product they have decided to be so.

I know I may be stating the obvious but: The economy and the world is a chaos system with a unpredictable future to come.


Possession of something does not prove nor equal ownership


That's awful. That happens when bureaucrats, who often don't understand the most simple basics of economics, mandate socialist rules to private companies. The companies affected by these policies will now just fire people to keep staff cost on the same level as before, period. Thus less people trying to fulfill the role of the same amount of delivery guys as before. And such more stress to fulfill more orders in the same amount of time. In other words the situation for the delivery staff is worse than before. Doordash will now have a much higher staff turnover rate where drivers quit after a few months due to e.g. burnout and are replaced by new workers who intend to take the high wage but only for a few months. Serious long-term employee positions are now gone. And as always nobody forces anyone in any way to work for doordash - people have their own free will to choose to work for doordash for any dollar amount that is offered to them.

No minimum wage is what creates competition between companies, all industries affected by minimum wages already have and will have shitty wages for ages to come. Switzerland as an example is a country where cleaners (CHF 4K a month on average) without any serious education earn a bit less than a well educated professional mechanic and 2x more than a local branch bank employee in Germany, simply because of no minimum wage restrictions (also after monthly living expenses in Switzerland which are relatively high in certain aspects).


In Germany and the Nordic states wages are largely controlled by the powerful trade unions, the likes of which do not exist in the US and likely could not exist under current labor laws. Without powerful trade unions to set the floor, we have minimum wages. The alternative - allowing poverty wages - ensures the success of business models that can only survive by employing workers who rely on state aid (or are otherwise destitute). In effect, removing the wage floor just makes government bigger and almost everyone poorer.


> In effect, removing the wage floor just makes government bigger and almost everyone poorer.

Nope, this is absolutely false, it is exactly the other way around.

I am not quite sure what you are trying to accomplish with your whole comment. It neither makes sense nor is it strictly related to what I just posted. Did you want to debate an argument of mine, just post your personal views about labor in general or simply troll? I am always open for a discussion.

Besides are labor unions (you are referring to the British english version) heavily involved in labor and wage discussions in the USA. The US is literally a labor union hell, so I don't get your point on that matter either.


You advocated for abolishing the minimum wage. I advocated otherwise. My comment was a clear and direct response to what you wrote.


The majority representing non technical population, journalists and 50+ expert dependent bureaucrats (mostly law academics - never worked really) shitting their pants over alleged "ai" dangers indoctrinated by "ai" executives to push ahead regulation to secure their market position, or in the case of google because it makes their now shitty search business model obsolete in the long term, by creating entry barriers thus reducing competition.

Meanwhile a guy somewhere in Africa adjusting an answer probably stating that humans can do photosynthesis: bruh


This is getting silly on the same level like the EU demanding Netflix to pay a certain percentage to local movie funds or enforcing certain rules to platforms owned by Meta to protect "user interests" about which no user really cares about. Amazon is not a self-evident service run submissive on behalf of the citizens. It's a private company. Nobody forces to do business with amazon nor is one forced to buy anything from it. There is something called freedom of contract. Amazon could demand a 90% fee, if that's a fair price to do business / to pay is up to the business / the customer. Looks like a ton of businesses are ok with not selling at a discount elsewhere - they signed. As money, markets are amoral. Consumers choose what they choose. There is no such thing as a monopoly in a free market system. At anytime anyone can compete with Amazon or Google, the 'gatekeeper' argument does not hold at all, this is competition - there is no such thing as fairness in markets and that's good. Nobody forces you to use android where googles product can't be removed and nobody forces you to use amazon for being just amazon, the number 1 in e-commerce. If your the operator of a business and whining about 'fairness' you surely should go find a normal job. Free will and free markets is all what matters, adults are mature, nobody needs a gov organization like the FTC wanting to split up businesses. People want to use amazon, period. At the same time amazon has 0 obligations to them or anyone else. Be real and sane to yourself.


The unlimited “freedom of contract” is an idea that the US Supreme Court reversed position on in the 1930s – merely 30 years after it was invented – and for good reason. For those wondering, “freedom of contract” as a term of art is essentially the idea that a government cannot regulate the behavior of parties to a contract, because the involved parties have some unlimited power of contract. The US Supreme Court found this in Lochner v. New York (1905), and reversed it in West Coast Hotel Co. v. Parrish (1937).

You seem to have implied a business’ right to exist, and operate at the expense of others free from regulation. As demonstrated, the earlier part of your comment was rather light on factually correct information, but could you cite the jurisprudence backing this idea of yours?


The Court reversed its position because many of justices that supported the Lochner case retired only to be filled in by political allies friendly to the New Deal like senator-turned-judge Byron White. The ones that remained were allegedly pressured by the Roosevelt administration's threats to pack the court (i.e. the switch in time to save nine). Regardless, the actual jurisprudence on Lochner hasn't been rebutted, only deemed unpopular by both wings of the court. The conservatives, due to the invocation of substantive due process, and the social progressives, due to their general aversion to recognize negative economic rights. Law schools will cite Oliver Wendell Holmes Jr.'s lone dissent as "proof" of Lochner's failings, but a close study of it (and of Holmes's legal "realism" as a whole) reveals it to be fallacious, hypocritical, and nihilistic.

In addition, your definition is inconsistent with the standard applied by Lochner or the Constitution. In the majority opinion of Lochner, the power of contract was not unlimited, as the court deemed health regulations in general as a proper exercise of the state's police powers. However, the State of New York had to demonstrate that its health law regarding employee hours was not employment regulation in disguise (hint: it was) and that any such regulation did not infringe upon the protection of rights afforded by the 14th amendment (hint: it did)

Contrary to your statement, freedom of contract had preceded Lochner for over a century. Article 1 Section 10 of the Constitution explicitly recognizes that the states may not inter alia impair contracts. The Contracts Clause has been invoked in Fletcher v. Peck and Trustees of Dartmouth College v. Woodward. Both cases form the bedrock of modern contract jurisprudence today.


Yes, almost every country in the world has restrictions on this. For example in the case of employment, with a contract stating that you have to work for life for a company, you can easily challenge it in court since it is more than obvious unconscionability. But the limitations on 'freedom of contract' by the us government never made or make the contracts businesses went into with amazon illegal or contestable.

There is no such thing as 'operate at the expense of others' in this case. Again, nobody forces you to buy at amazon. There is nothing illegal with setting requirements for a seller, e.g. not selling at a discount elsewhere. If you do not wish to sell on amazon you can freely choose to sell at any other store. If one is whining about not having the same reach: Nobody has the right to challenge amazon for just being good and demand anything from them. There is no law that gives you the right to be able to do business 'in the land of amazon' at conditions that please you.

Amazon is a private company. The FTC is treating amazon exactly how many people wrongly see it, as a sort of common good - quote:

'Amazon is a monopolist. It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.'

(https://s3.documentcloud.org/documents/23991590/read-the-ftc...)

Bureaucrats.....Good luck proofing 'conspiration to monopolize'???. A thing which is not even possible in a free market society. The practices of amazon are in fact competitive - doing everything to kill the competition - a thing every capitalistic incentivized company who wants to become or stay at the top does. Those practices of the FTC are anti-competitive and a huge intervention, their policies is what hurting customers.



I went there on mobile Safari and the UI just let me go between Free and Ad Supported, saying “Subscribed” next to the option I just clicked, regardless of the fact that I don’t have an account or the plugin installed. So that seems nice and trustworthy.


Well, what do you think happens when you dereference a null pointer? Undefined behavior. It does work correctly when you have the extension installed.


Seems like it is disclosed so shouldn't be "news"?


Just cause it's disclosed doesn't mean it's acceptable. This crap takes us back to the late '90s. Remember all those IE toolbars?


"Real" wealth management has a lot more legal work behind it since a non trivial portion of wealth management are topics like inheritance and planing for the next generation. Also wealth management is more focused on wealth preservation than generating high returns, that is more the focus of asset management (e.g. hedge funds, private equity etc.). But since this piece of software is focused on the individual the term seems applicable even though something like personal finance would be more suitable. For "real" wealth management you hire usually professionals. It has a lot of good and bad sides that a majority of people think that when it comes to finance they can compete on an equal level with experts who do this every day. But if your skilled you surely save a ton of fees.


Also wealth management is more focused on wealth preservation than generating high returns, that is more the focus of asset management (e.g. hedge funds, private equity etc.).

This is a bit simplistic. It’s more focused on setting a target return and cash flows consistent with your current life plans. Whether this is a defensive or more aggressive position is really up to you and your goals. But Wealth managers are about putting an investment strategy in place to achieve that. They also help actively manage your portfolio to address macroeconomic trends.


>"Real" wealth management has a lot more legal work behind it

This is just me, but if I had legal work and deep pockets, I'd hire a lawyer.

>a majority of people think that when it comes to finance they can compete on an equal level with experts who do this every day

>But if your skilled you surely save a ton of fees.

If you are "focused on wealth preservation" rather than "generating high returns", what is the need for skill?

If I won the lottery, and I just sent, say, a $500M check to a regular discount broker and bought an index fund, is someone going to take it away from me? Are the wealth management divisions of every podunk bank and credit union there for a reason? Would I need to hire "protection"?

Warren Buffett famously said he "upon his passing, has directed the trustee for his wife’s benefit to “put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

And Barack Obama reportedly put all his assets in government bonds when he became President to avoid conflicts of interest.

Obviously not everyone takes this sort of simple approach, but some famous examples seem to prove it's possible.


I agree. Most private money managers are not worth the cost: 75bps per year (or more) on managers balance. I recommend: Half your age in percent (30yrs old -> 15%) invested in 2yr US Treasury notes, plus remaining in low cost S&P 500 ETF. You will beat 99% of "wealth managers" after a decade, and 99.9% after two decades.


Do you have any data to support this?


Vanguard returns, or Warren Buffet's ETF bet against hedge managers come to mind.


> If I won the lottery, and I just sent, say, a $500M check to a regular discount broker and bought an index fund, is someone going to take it away from me?

Not from you, but the IRS will take 40% of everything when you die.* Only 60%, at best, goes to your heirs depending on state law. Unless you proactively plan.

* Yes, yes the $13M federal exemption but that's a rounding error at the $500M+returns scale.


Aw, the poor little workshy brats. If there's three of them they'll have to struggle by on $100 million each. By the safe withdrawal rule, that's just $4 million a year each indefinitely.

Cry me a river.


Good. Should be more like 80%.

No more aristocracies.


> If I won the lottery, and I just sent, say, a $500M check to a regular discount broker and bought an index fund, is someone going to take it away from me? Are the wealth management divisions of every podunk bank and credit union there for a reason? Would I need to hire "protection"?

The market might take it away from you. Last year the S&P returned -20% - there goes $100M!


By this dumb reasoning of unrealised losses, you should never invest in any security (bond or stock) else the exact same scenario may happy. You are destined for the poor house without taking equity index risk in this generation.


I was explaining why capital preservation is important with this (albeit) dumb example. Obviously someone with $500M is going to be a bit more sophisticated about it (there are reasons hedge funds that return 15-20% annualized charge 2 & 20 - or some now do 3 and 30 with a 5yr lockup).


>hedge funds that return 15-20%

This is always a scam. Madoff died in prison, you know.


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