Another feature of competitive markets is that “not betting” is always available as a safe default option. Maybe that means waiting to bet until some unknown future date when your models are good enough, maybe it means never betting in that market. In many other contexts (like responding to covid-19) there is no safe default option.
“Not betting” is an illusion. In all cases, choosing not to take any given bet is itself a bet: you’re betting that you’ll find something better to do with that chunk of resources.
Not betting, in the sense of keeping the money in index funds or somewhere else on the risk/reward Pareto frontier of easy strategies, at least limits your expected downside compared to entering shark-infested waters in an imperfect cage.
This seems important.
Another feature of competitive markets is that “not betting” is always available as a safe default option. Maybe that means waiting to bet until some unknown future date when your models are good enough, maybe it means never betting in that market. In many other contexts (like responding to covid-19) there is no safe default option.
“Not betting” is an illusion. In all cases, choosing not to take any given bet is itself a bet: you’re betting that you’ll find something better to do with that chunk of resources.
Not betting, in the sense of keeping the money in index funds or somewhere else on the risk/reward Pareto frontier of easy strategies, at least limits your expected downside compared to entering shark-infested waters in an imperfect cage.