Quant explains how the rich exploit you

Humans are bad a pricing risk. This leads to poor life decisions where they’re exposed to more risk than they realize and nobody explains this to them, because those industries profit from their ignorance.

As a former Wall Street quant who worked at a Hedge Fund, I explain how the wealthy elite understand how to properly price risk in their lives, and they know how to exploit your poor decisions when the time is right, in order to take your money when you’re most desperate and have no choice but to sell to them at a deep discount.

[LitNomad]

So what’s the solution to being triple-long?

The short answer is to leave some dry powder for a rainy day. Have savings that can last you 6mo if you get abruptly fired. You may lose a lot in stocks and real estate, but at least you won’t be forced to sell at a big discount to a predatory buyer.

This video is mostly trying to raise awareness of the risk the average person is holding. How you choose to reduce your risk is up to you.

Other potential solutions are to rent instead of buying if you’re in a case like those poor Exxon Mobil employees and you recognize that the Exxon Mobil plant is the primary economic driver of that neighborhood. Then use the money you would have put in home equity towards an S&P index fund. Index funds perform about the same as owning a home. There are many studies done on this.

Or do what my friend did which was to buy in Chicago and do a reverse commute to the Exxon Mobil plant. Big cities have many different economic drivers, and they’ll certainly be uncorrelated with the health of Exxon Mobil alone.

All of Silicon Valley home prices shot up because FAANG firms shot up. I personally would rent if I got a big tech job there.

These are all potential solutions to reduce your risk to at least double long since we don’t all get invitations to invest in hedge funds.

For those pointing out that HFs underperform the S&P: anyone can start a HF. There are plenty of garbage HFs out there clouding the stats, but I know partners at my firm who are very wealthy, and they all invest in HFs. They know who the good managers are and their funds are often invite only. For perspective, my HF outperformed the S&P every year for over 15yrs. Never had a down year. I understand the strats, and it’s almost impossible to lose money. There are many HFs like this out there, they simply have no incentive to have people know they exist. They are closed to new capital because they can’t make the same returns with more capital. Many strats require being lean and can’t scale bigger without pushing the market.

Lastly, the Seth Rogan film I referenced was called Dumb Money. Seth Rogan played the HF manager who was shorting GameStop and Roaring Kitty and his Reddit army lifted him out of his shoes on his huge short position. But it’s an example of what a HF does. Shorting stocks is uncorrelated to the broad market.

[Daaannn-gk]

Building wealth requires developing strong financial habits. At 42, I had just $178k to my name when I realized the importance of a disciplined approach. I chose the stock market as my growth vehicle and enlisted the help of a skilled financial advisor. Financial management is a critical topic that many overlook, often leading to significant regrets down the road.

[averagehank]

Your wealth comes from the permission of people who accumulated wealth in the past (through means of power or inheritors of inequality) and pay you to play a part in maintaining the economic inequality that was formed through resource hoarding or exploitation through the ages.

With that context in mind, it makes you look less human when your take away message to give is to tell people without wealth/power to sacrifice as much instinctual vices/comfort as possible to minimize being exploited by the rich and powerful. That is preaching as much sacrifice as telling someone to reject society and pleasures to live in the mountains to obtain spiritual enlightenment (but in your case it’s financial comfort in twilight years).

The rich and powerful just exploit humans and you played an integral part in providing them with infrastructure to always be greedy instead of spending it like normal human beings. No amount of sacrifice by the less powerful will make a dent in that. Those with power decide the change.

[npc-drew]

One of my younger days mistake was living above my means, and every time I had to sell things to survive. Now I live way below my means, and stress-free.

One thing about money I realized is when you don't have any, you want to show wealth, and when you do have it, you want to hide it.

[ivankholod]

Bro idk why you’re getting all this hate. Interesting video.

[muhammadufarouk]

Progress is progress, regardless if it is slow or consistent. Either ways one still goes up, credits to Lunvo

[WealthyChronicle]

So, basically, we’re all playing the same game but the rich are the ones who understand the rules? Game changer 💡

[Creamy_Durian]

This is a very powerful video on wealth building and is exactly why you see that some of the most boring people are the most wealthy among their peers. Often time, these are individuals with average income. Thankfully there's Youtube because I never quite understood it until I started seeing videos like these. It all comes down to risk management.

[waqas]

That was some of the best Content i ever watched on Investing as a normal person and what risks we shoukd be aware of . Many thanks

[coltrane]

you can also hedge your whole mind on material wealth and end up short.. there’s more to life

[patite]

I would appreciate it if you could create a series of videos discussing your activities as a prop trader.
• Which instruments did you primarily trade?
• What strategies did you implement?
• How was risk management handled?
• Did you follow a quantitative or discretionary approach?
• How did you adjust your strategies during volatile market conditions?
• What were the key metrics you used to evaluate to go long or short?
• Can you describe a typical trading day or week?
• How did you stay informed about market trends and news affecting your trades?
• Were you doing only market making?
• Is there collusion among firms to go short or long an instrument?
• What was the role of your boss?
• How big was the turnover among traders in the company?

[MrPuff]

Is this the quant variant of the MIT educated Neurosurgeon?

[tionx]

Actually, here's food for thought. Far more than your education, career choice, or investments, the biggest risk many people get blindsided by is marriage. Who you are with literally dictates not only the financial aspects of your life but the qualitative aspects too.

Not many people price this risk correctly.

[animal-lover--]

i love your videos and your channel. my favorite types of videos are like this. no crazy editing no intro/outro. just a stream of consciousness

[JokerFace]

Imagine the USA used to be filled with people of his intelligence. Very wise insight and thank you for sharing.

[GC-mvgi]

I would say that not many ppl on yt are purely sharing knowledge n wisdom. At least the big channels which we r most likely be exposed to, r grifters who are trying to make money, and those ppl r not even serving the viewers, they r just serving the algorithm. Thats why channels such as this one needs to be followed liked and turn on notification 😊

[ColeIsKing]

Spot on with the herd being 3X leveraged. I learned this a few years ago and realized to hedge different areas of risk in my life (Career, Business, Family, etc.)

[timvigneau]

I work 20 hours as a part time music teacher at a school, 20 hours delivering for Amazon, and I teach private music lessons at a lesson studio. If I get cut from my school, I can work more hours delivering packages, and/or teach more private lessons. If I lose Amazon, I can teach more music (hustle with WAY more private lessons, or get a full-time teaching gig). If I lose one job, it’s not like I’m entirely out of income. I have different escape hatches. Plus I have more flexibility and control over my schedule. It’s not a ton of money, but it’s all I need. Most freedom I’ve felt in my professional life.

[shekondog]

My college roomate at NYU was a quant at Citi. PhD in Mathematics, Computational applied Math. Made $1 million a year on average before taxes. Last year at age 40, he had a massive stroke and is now disabled. His "blonde" gf left him, all his friends disappeared. I on the other hand sell vintage sneakers on ebay, wake up at 10 am, in gym for 2 hours a day, fit and make 2x of him sitting at home, getting my feet massaged. Low stress & I have zero expectations. Don't work for anyone. Best decision of my life. My happiness is hedged, to me.

[henrythegreatamerican]

This video just proves to me many recessions are created on purpose. Recessions eliminate the overleveraged bad investors and gets prices to dip low enough for "smart money" to scoop up at a bargain.