Re:Programmers Should Invest
by houseabsolute on Saturday January 02, 2010 @12:08PM
(#1027375)
> but best thing about them is they will innovate more.
The price of the stock already reflects this as well (at least to the extent people in the market guess that it is true). When you buy the stock on the basis that the company will innovate more, what you're really betting is that it will innovate not just more, but more than other people thing it will.
>> That's the whole point of investment: you place your bets using your knowledge and intuition. It's a game in the end.
That sounds like a better definition of gambling than investing.
To me, the whole point of investing is so that money I don't need at the moment will be worth more when I do need it. That's why I buy low-cost passive index funds and don't try to out analyze the analysts. By buying an index fund, I get the advantages of all of the best analysts out there - I'm effectively crowd-sourcing my investment strategy.
You could have said the same thing about Microsoft in the late nineties and few would have doubted you. Yet their stock is now worth somewhat less than in '99 and early 2000. Worst of all, there's been no consistent growth at all during the last 10 years.
Of course there are companies that fall under "constantly innovating" category and yet some of the things they come up with fail. It's hard to tell, or if it was easy, there wouldn't be good or bad investors, but only good ones. That's the whole point of investment: you place your bets using your knowledge and intuition. It's a game in the end.