Corruption Is Inevitable

Corruption in systems built by humans happens everywhere. Systems that hold corruption to a minimum or are able to self heal from corruption are truly amazing. The only two systems I have seen that generally can heal from corruption are the free market, which heals through removing corruption by natural selection and bankruptcy, and democracy, which heals through periodic elections and purges.… read more “Corruption Is Inevitable”

Risk of Broker Bankruptcy?

Robinhood had to take a billion dollar emergency loan to meet it’s requirements. We have seen Robinhood is a very shakily run brokerage with lots of downtime and was fined last month for illegal activity in how it handled client accounts. Interactive Brokers CEO pointed out that if one brokerage goes bankrupt, the other brokerages are obligated to pay off its debts.… read more “Risk of Broker Bankruptcy?”

Cautionary Note on Stock Mania

Cautionary note to my friends: As a longtime investor, I am seeing a lot of stock newbies getting sucked into a very overhyped markets and falling for scams. A lot of people right now online are doing a variety of pump and dump type schemes on a variety of stocks (Gamestop, AMC, Blackberry, etc). These people are persuasive, but they are hoping to con you into buying their shares.
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Short Selling Is Not Immoral

Why are people saying that short selling is immoral? You buy a stock if you believe a stock is undervalued, you short it if you think it is overvalued. In either case, you believe in something and take a risk based on that. Short sellers help price discovery and often uncover frauds like Enron. Short sellers take more risk and lose money more often than buyers, and short selling itself is not immoral.… read more “Short Selling Is Not Immoral”