Why I Couldn't Believe This Investment Advice from 2002 - and How Chaos Theory Debunks It
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- Опубликовано: 30 апр 2023
- Financial advice rarely considers the chaotic nature of markets. But as Benoit Mandelbrot points out with his idea of fractals, the financial industry often woefully miscalculates the level of risk and expected return, particularly in relatively short timeframes, like a decade.
Everyone should make the effort to learn how to critically evaluate investment advice. Fractal and Chaos Theories can help you understand some of the common pitfalls. In this video, we jump back in time to the bull stock markets of the 80s and 90s and explore what would have happened had you followed some of the investment advice offered back then, while exploring the fractal theories of Benoit Mandelbrot.
PLEASE NOTE: This video is not intended as financial advice or advice on how you should invest. You should take no specific strategy or recommendation for investing from this video. It is intended only as an overview of my own experiences and observations on investing, and a commentary based on historical analysis and my understanding of the chaotic and fractal nature of stock and other financial markets. Seek out a qualified financial advisor and carry out your own due diligence before commencing any form of investing.
SOURCES:
New Zealand Herald newspaper:
nzherald.co.nz
Market ride goes from fun to frightening:
www.nzherald.co.nz/nz/market-...
CREDITS:
NZSX50 Chart:
Jashuah, CC BY-SA 3.0 (creativecommons.org/licenses/..., via Wikimedia Commons
Nikkei Chart:
Monaneko, CC BY 3.0 (creativecommons.org/licenses/..., via Wikimedia Commons
Mandelbrot photo:
Rama, CC BY-SA 2.0 FR (creativecommons.org/licenses/..., via Wikimedia Commons
3D Fractals:
Brotter121, CC BY-SA 4.0 (creativecommons.org/licenses/..., via Wikimedia Commons
Normal Distribution:
Wolfgang Kowarschick, CC BY-SA 4.0 (creativecommons.org/licenses/..., via Wikimedia Commons 
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Great channel i think this will be a staple in the financial world in the future.Ppl are catching on love the evolution.
This is a great channel
Thank you!
fr man its a blessing hidden in a hay stack
What about day trading is work or not ? Great Channel
My personal opinion only is that day trading is very risky and is only really suitable for very sophisticated traders, probably doing this professionally for a hedge fund or something like that. I tend to think that what people like Warren Buffett and Robert Kiyosaki say make good alternatives to the standard narratives on investing, but that said the standard advice isn't that bad ... I just think it can be oversold, and sometimes (in some economic/market situations) even a little harmful. But not the lose all your money kind of harmful, which day trading can be!
@@fractalmanhattan What's the solution 😅?
In the story in this video, the answer for me personally was to invest in a house not in a managed fund - which worked out much better. I saw on a RUclips trading advice channel that the aim is to get rich slow rather than get rich fast (which often turns into lose money fast!), which I think is a really good description of what is likely to work. The key message I hope that is in my video is that it’s not that managed funds are necessarily bad, but more that they are not so great that you should only ever consider them when investing. Warren Buffett's advice is that you should really understand well what you are investing in - even if these are just short-term trades - and that the trick is that it's better to be investing rather than not. I can't give you advice, so please don’t take this as such, but my opinion is that it is okay to trade directly in the markets rather than via managed fund, but be aware it is harder work, and that you face greater risk, which depends on exactly what it is you are doing. I think though there's no simple solution and it depends a lot on your personal situation - Robert Kiyosaki talks about investing to make your money work for you, and he mainly talks about investing in housing, but he considers any investment where your money provides you a return is worthwhile. He seems to advocate for seeking opportunity by picking market swings as well - for example, he talks about how much money he made during the COVID pandemic. But basically his theme is to develop a habit of investing, and look for opportunities. It’s the opportunities part that the standard advice ignores.
this shuoldn'ty have less than a thousand views like this, youtube pull up fr
Hee hee, yeah I think so too!! Thanks a million - really appreciate your comments!!