Soler

the foundation was always there. i just point at it first

[Soler @Solerbtc]

An economist ran a simple game: pick a number from 0 to 100, and whoever lands closest to two thirds of the average wins. Pure logic says the answer is 0. When thousands of real people played, the winning number was 13.

His name is Richard Thaler. He won the Nobel Prize in 2017 for a career spent proving economists wrong about how real people behave, and he ran this game in a newspaper to make one point about markets.

To win, you cannot just be smart. You have to guess how smart everyone else is, then how smart they think you are, and stop one step before the crowd does. Pure logic says zero. Real people stop early, so the winner sits in the middle.

That is not a puzzle. That is the entire stock market. You are never paid for being right about a company. You are paid for being right about what everyone else will believe, slightly before they believe it.

Keynes described this in 1936 and called it a beauty contest. Ninety years later most investors still play it as if the goal were to find the truth.

[Soler @Solerbtc]

@Neighboritto that discipline made him the richest man alive. from 2010 to 2013 slim topped the world list at about $73 billion, the first person from a developing country to ever hold the spot.

[Soler @Solerbtc]

An economist ran a simple game: pick a number from 0 to 100, and whoever lands closest to two thirds of the average wins. Pure logic says the answer is 0. When thousands of real people played, the winning number was 13.

His name is Richard Thaler. He won the Nobel Prize in 2017 for a career spent proving economists wrong about how real people behave, and he ran this game in a newspaper to make one point about markets.

To win, you cannot just be smart. You have to guess how smart everyone else is, then how smart they think you are, and stop one step before the crowd does. Pure logic says zero. Real people stop early, so the winner sits in the middle.

That is not a puzzle. That is the entire stock market. You are never paid for being right about a company. You are paid for being right about what everyone else will believe, slightly before they believe it.

Keynes described this in 1936 and called it a beauty contest. Ninety years later most investors still play it as if the goal were to find the truth.

[Superior @andreysuperior]

https://t.co/rUN1cPDY65

[Soler @Solerbtc]

@0_xSan he wasn't even the only one who caught it. harry markopolos handed the sec a detailed fraud case in 2000 and warned them for nine years, and they did nothing until madoff confessed.

[Soler @Solerbtc]

@limalemonnn before the hedge fund, thorp was asked to vet Bernie Madoff's returns in 1991. he ran the math and told his clients to stay away, calling it a fraud. madoff didn't collapse for another 17 years.

[Soler @Solerbtc]

@0_xSan worth it. the part that stuck with me: he studied these biases for 50 years and still says he falls for them himself. knowing the trap doesn't turn it off.

[Soler @Solerbtc]

A loss feels about twice as painful as the same size gain feels good. That single ratio, roughly 2 to 1, explains why people sell their winners and cling to their losers all the way down. The man who proved it never took a single economics class.

His name was Daniel Kahneman. He was a Jewish boy in France under Nazi occupation, out past curfew one night with his yellow star turned inside out, when an SS officer stopped him. Instead of turning him in, the man hugged him, showed him a photo of his own son, and gave him money. Kahneman said it taught him that people are endlessly complicated, and he spent his life proving it.

He and Amos Tversky took apart the idea that humans are rational about money. They showed we fear losses more than we value gains, that we judge everything against a reference point, that we are certain of things we have no reason to be certain about.

In 2002 he won the Nobel Prize in Economics, a psychologist who had never studied economics. Tversky, who built all of it with him, had died six years earlier and could not share it.

Everything Wall Street charges you for assumes you are rational. He spent 40 years documenting, in detail, that you are not.

[Superior @andreysuperior]

https://t.co/rUN1cPDY65

[Soler @Solerbtc]

@0_xSan the real killer was correlation. positions that were supposed to be independent all moved as one in the panic. the hedge vanished exactly when they needed it.

[Soler @Solerbtc]

@0xzynex yeah. the tip made him maybe $40m, and he was already worth far more, clean. he traded his freedom for his smallest score.

[Soler @Solerbtc]

@0xzynex yeah, one habit break after thirty years of it holding.

[Soler @Solerbtc]

@0xzynex the twist, he called from a burner every time, but once left it on walters’ voicemail by mistake. that recording convicted him.

[Soler @Solerbtc]

@Allx032 the wild part: that move, sliding the gap to zero, had no rigorous foundation for about 150 years. a bishop mocked it in 1734 as "the ghosts of departed quantities." newton and leibniz's calculus worked long before anyone could prove why it should.

[Soler @Solerbtc]

A loss feels about twice as painful as the same size gain feels good. That single ratio, roughly 2 to 1, explains why people sell their winners and cling to their losers all the way down. The man who proved it never took a single economics class.

His name was Daniel Kahneman. He was a Jewish boy in France under Nazi occupation, out past curfew one night with his yellow star turned inside out, when an SS officer stopped him. Instead of turning him in, the man hugged him, showed him a photo of his own son, and gave him money. Kahneman said it taught him that people are endlessly complicated, and he spent his life proving it.

He and Amos Tversky took apart the idea that humans are rational about money. They showed we fear losses more than we value gains, that we judge everything against a reference point, that we are certain of things we have no reason to be certain about.

In 2002 he won the Nobel Prize in Economics, a psychologist who had never studied economics. Tversky, who built all of it with him, had died six years earlier and could not share it.

Everything Wall Street charges you for assumes you are rational. He spent 40 years documenting, in detail, that you are not.

[Soler @Solerbtc]

Vanguard manages around $9 trillion today. Its founder died worth about $80 million, because he built the company to be owned by its customers instead of himself.

His name was John Bogle. In 1976 he launched the first index fund for ordinary people, and Wall Street mocked it as "Bogle's Folly," un-American, a guaranteed way to stay average. His idea was almost insultingly simple: stop trying to beat the market, quietly own all of it, for almost nothing.

50 years later every firm that laughed sells the same product. And the man who could have been a billionaire many times over structured his company so the profit went back to the people who invested in it.

His whole method fits on one page:

Don't hunt for the winning stock. Own every stock, and stop guessing. Costs are the one thing that compounds against you. Just 1% in fees can quietly take a third of a lifetime's returns. Almost no professional beats the market over the long run, and you pay them the most to try. Time in the market beats timing the market. Do nothing, on purpose. Whatever Wall Street takes in fees comes straight out of your retirement. That is the whole equation.

"Don't look for the needle in the haystack. Just buy the haystack."

He gave away the one method that quietly beats the people charging you the most, and kept a rounding error of the fortune he could have taken.

[Soler @Solerbtc]

@andreysuperior The crowd bets on direction, while the smart money bets on structure. Once you realize risk is just poor engineering, every market becomes a tollbooth.

[Soler @Solerbtc]

@ZentrixHQ This proves that a 7 year microsurgery gap was never about human talent, but limited hardware. Remove the biological bottleneck, and a $300k education moat evaporates in an afternoon.

[Soler @Solerbtc]

Under the model Wall Street still teaches, the crash of 1987 was a once in a billion years event. It happened anyway, on a single Monday, wiping out 22% in a day. One man had spent decades warning the math was broken, and almost nobody listened.

His name was Benoit Mandelbrot. His family fled Warsaw and then hid in the French countryside through the war, and he grew up with almost no formal schooling, teaching himself geometry in his head. He never fit the academic mold, so he spent 35 years at IBM instead, an outsider inventing a new kind of mathematics.

He called it fractals, and when he turned it on markets he found something the industry did not want to hear. Prices do not follow the neat bell curve the models assume. They have fat tails. The ruinous moves that are supposed to be almost impossible actually happen every few years.

That same bell curve made 2008 a 25 sigma event, something that should not occur in the age of the universe. It occurred. Mandelbrot had been saying it would since the 1960s.

Yale finally gave him tenure at 75, the oldest professor ever to receive it there. By then the market had proven him right three separate times, and it still runs on the model he spent his life trying to bury.

[Soler @Solerbtc]

Under the model Wall Street still teaches, the crash of 1987 was a once in a billion years event. It happened anyway, on a single Monday, wiping out 22% in a day. One man had spent decades warning the math was broken, and almost nobody listened.

His name was Benoit Mandelbrot. His family fled Warsaw and then hid in the French countryside through the war, and he grew up with almost no formal schooling, teaching himself geometry in his head. He never fit the academic mold, so he spent 35 years at IBM instead, an outsider inventing a new kind of mathematics.

He called it fractals, and when he turned it on markets he found something the industry did not want to hear. Prices do not follow the neat bell curve the models assume. They have fat tails. The ruinous moves that are supposed to be almost impossible actually happen every few years.

That same bell curve made 2008 a 25 sigma event, something that should not occur in the age of the universe. It occurred. Mandelbrot had been saying it would since the 1960s.

Yale finally gave him tenure at 75, the oldest professor ever to receive it there. By then the market had proven him right three separate times, and it still runs on the model he spent his life trying to bury.

[Zynex @0xzynex]

https://t.co/s7CSVJZhBN