Survivorship Bias In High Variance Games
Importance: 4 | # | psychology, fallacy, near
market shenanigans played top-down like this are unimaginably cruel. i didn't make a single trade the last week but there are probably 50,000 people who panic sold half their retirement mon or tue and are considering suicide and the death toll for such things is literally nonzero
who knows what is green or red tomorrow, but it is so unimaginably profitable to spread panic news and push notifications and articles and so on to the entire public that we encourage highly irrational choices among our fellow citizens, and i've watched people die from this
theres one type of community i dislike much more than baseline which is communities where high-variance outcomes are encouraged, but the low-rollers are instantly discarded and thus not seen by newcomers.
many types of communities like this exist!
if you visit psychadelic communities everyone seems to be having a good time. and that is because the small % of people who had a terrible time went completely insane and left or died, well, you don't see them anymore. they aren't posting, they aren't at the meetups. they are gone.
but a lot of finance communities are like this too, the WSB types, you know. everyone is having a fun time, sometimes people lose their retirement but they just post a funny joke and laugh it off, but, what you don't see is that there's a lot of (unfortunately literal) death as a result. the ratio of people who consider suicide to those that actually do it over financial events is very high, but the sample size is large enough that it gets up there!
i think i just notice the people dying at a much higher rate than others due to past experiences? i dunno. there's a lot of blood, but no one likes looking at blood and few who are bleeding tend to show this off, so the resulting experience generally just looks like business as usual