The smarter the people, the bigger the ego and limited the vision.

Between ArsTechnica, HN and reddit and you can bet against popular opinions on this. You can also identify cult formation too.

HN != Financial advice

Systematic risks are still risks even if they don't manifest and if you want to argue Paul Graham is wrong you have to argue why the risks aren't risks.

(I don't know what risks he pointed out, so I don't know whether I think he's right or not)

when the tweet was made the universe was about to make a dice roll. There was a probability that bitcoin went down and a probability that bitcoin went to the current price, and the universe rolled and happened to land on the current state, but the others could also have happened if luck had gone another way?

Is that right?

If we're talking about the dice roll example, just because your rolled a six, it doesn't mean that rolling specifically a six wasn't more unlikely than rolling a number from 1 to 5. Which means that if you planned (either explicitly or implicitly) on things working out in a way equivalent to rolling a 6, then your plan was risky.

And even if we lived in a deterministic universe, we don't have perfect information, so we cannot know the outcome of big events. Our best way to deal with them is to model things probabilistically based on what we do know and make our choices based on based on risk/reward.

I'm also not sure where you're getting the phrase "tail risk", I didn't even know what the term meant much less used it.

I guess I can see some crazy combination of physical objects colliding and nobody being able to predict where they land, I'm just not sure thats the right model for valuation of an asset.

> tail risk

Sorry if I introduced that. I just meant that it's occurrence far outside of the regular distribution.

For example, Bitcoin is up, as are most investments. It’s unfortunately also correlated in the other direction with the stock market so if the market tanks next month so does Bitcoin. But the link doesn’t go away if the stock market is fine, so Bitcoin could also yank in 2 months when the market tanks, or in X months… aka the risk is from the correlation not the short term outcome.

As to predictions, the best evidence we have is the universe isn’t deterministic. Quantium mechanics has everything rolling dice. So saying X didn’t happen therefore X couldn’t have happened appears to be inconsistent with how reality actually operates.

> The point about systemic risks is they don’t go away just because they haven’t happened yet.

I agree. But observing a state of instability or unpredictability is different than saying "X economic event a 10% chance of happening".

>> Length of ownership AND relatedly original cost basis. I think a lot of stocks can seem to defy gravity (i.e. high PE and/or high P/FCF) when the founder and the early investors HODL stocks. At $0.0001 per share, HODLing (in say TSLA, META, MSFT, BTC) is easy since there is/was no upfront capital paid in and holding has essentially no cost basis - so there's no need to act like rationally like a later stage investor.

>> Founders and early investors can easily own up to 40-50% of the company and really its only when the founder retires/starts diversifying and the founder and early investors start to unload - does price discovery occur on the entirety of the shares outstanding.[1]

[1] Mark Zuckerberg Sold Facebook Stock Nearly Every Weekday Last Year For Almost 11 Months https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-z...

Not really. The decision to not sell and to not buy is itself reflective of the price. If a stock is super cheap, people will buy. If the stock is priced fairly or overpriced, few people will buy. Same goes for selling.

People forget that stock buybacks also created a pool of equity for employee compensation, it isn't just about returning capital tax effectively.

But basing your expectations on 2021 would have done exactly that. So that argument is wrong.

If your real/amended argument is "no way to predict the level", as in predicting the exact amount, that's a much weaker argument that has barely any ramifications for investing. The specific amount is generally much less important than going over/under some threshold.

But it was obviously a plausible outcome.

Predicting it only took very simple and reasonable logic. "I bet the number stays the same."

A sports analogy: There's a game tomorrow where one team has 30% odds of winning. If someone bets on that team, nobody says "no one could have predicted that". It's obvious that it could happen, and it's plausible that it could happen. Tons of people predicted it.

And large quantities of the stock were purchased. There's tons of trading happening every day.

It's not like the people that expected a large buyback were acting in a vacuum. Stock value follows the average. To push the sports analogy, the team stock would still be going down even though many people are betting on them.

The only surprise with the buyback streak since last year is how poorly executed it was. They dumped $45B ahead of anouncing a decrease in DAU, then trickled after it tanked the stock.

It's cash returned to shareholders.

I think they are efficient most of the time, but there are edge cases that allow for higher risk-adjusted returns than predicted by a purely efficient framework. A notable example is Renaissance Technologies.

https://news.ycombinator.com/item?id=33573232

(Edit: I would have referred to the company as Meta, like you did, but “the Meta comment” could have been confusing, even with the capitalized letter.)

Markets: eventually efficient

> I was repeatedly trying to convince HN readers

There's not much point. Invest how you see fit and let others figure things out the hard way.