The Code is the Design

Note: The following is an old post written in 2017. The name of the service has been removed since the person who used to run the service seems to have sold the service, presumably to an unsuspecting mark. For those who can recognize the service, it was an Excel-spreadsheet based service called *** ****** ***** . Unfortunately, the preponderance of such scammers online casts a shadow on legitimate financial services. In fact, there is now another service called ***-*** ****** that seems to employ similar tactics; both as observed personally and as reported by others.  - Original Post - There is strong reason to believe that the Value Investing website that calls itself *** ****** ***** is a scam. Some of the most concerning issues seen on the site are: 1. A lot of claims shown on the front page are fraudulent. Some of the referral links lead to nowhere in particular. Most of the other claims are hard to verify. But the claims are made confidently enough to look convincing. Th...

  The stock market is essentially a reverse casino, but only when approached correctly. Casinos — Negative Inflow The most important aspect of the Casino is that is it is a profit making enterprise, i.e., it makes money for itself and it's owners. As they say: "The house always wins" So the net flow of money always has to be towards the casino, away from the gamblers. All else being equal, the gamblers — on average — lose money. Stock Markets — Positive Inflow The stock market is essentially the reverse of a casino; it is essentially a place to share ownership and profits of commercial enterprises. The profits are redistributed as dividends, or as retained earnings that lead to an increase in intrinsic value; which eventually reflects as an increase in stock prices and capital gains. Financial Industry — Negative Inflow The important thing to remember is that there is a second entity around the stock market and that is the financial industry — a...

  While losses should always be avoided, there may be a way to recover — and even profit from— losses under certain circumstances. Staying Invested Graham recommends staying invested at all times, since one never knows which way the market may go. The general rule of thumb is to invest everything except one year of expenses, and any emergency cash. Loss Recovery While it makes no sense to actually lose money under any circumstances, once the loss happens, some of it could be recovered as follows. As mentioned above, one would have to keep a certain amount of cash uninvested because short-term profits cannot be withdrawn without tax obligations. But short-term losses can be offset against future short-term gains. This allows one to invest more money than one would normally — after taking a loss — knowing that some of the profits can be withdrawn without tax obligations. Possible Outcomes If the market goes up significantly in the following months, one may e...