Survivor Deviation, Lego Block Edition-Large Image
To listen to the audio voice version of this article, click here.
“Research: Toys prove to be a better investment than gold, art and financial securities”
Now make peas babies. .. https://t.co/LQI4F3t5MY
— Barry Risoz (@ritholtz) December 13, 2021
“Forget about gold: research shows that investing in Lego bricks can make more money“… Over the years, I have been criticizing Gold Bugs for their blind faith in their favorite shiny yellow metal. I was an early adopter of the Gold ETF (GLD), when the spot price of gold was about US$400 (I was at 1300 And 1700); Since then, I have been skeptical of gold as a core investment portfolio.
But in comparison with Lego bricks, as an obvious example, I have to defend gold Survivor biasThere is nothing easier than telling you what has performed well, but without a time machine, we cannot invest in this way.What the post-mortem review tells us Already done Ok, not what Coming soon well done.The trick to investing is the ability to do this forward Asset prices are rising (nonsense!).
This kind of thing is catnip to the media: the first time I encountered this was in protector, But it spread from there (Small invention, Hill in). “Research shows that investing in Lego is more profitable than gold“At least a little bit cautious, not from more conclusive nonsense HSE University Regarding the research papers published by their two economists: “Toys prove to be a better investment than gold, art and financial securities. “
The unfortunate tendency of survivors to deviate from the team is to overemphasize the big winners while excluding the big losers.In the investment world, this was first recorded in the positive Mutual Fund Companies that like to brag about the average return of their fund series; Somehow, These data tables omit funds that were closed mainly due to poor performance.
Why is this important? pioneer And DFA (two indexed stores) found that, on average, Half of mutual funds close within 15 years. The surviving winner looks Oh much better When you get back the long-term returns of the bottom half of all funds, especially when they are closed because of poor investment performance.
But it’s not just a toy; we see this Collection car, Art, And wine, not to mention Alternatives Such as private equity, hedge funds and venture capital. We all know the names of the biggest winners, but we don’t remember those who fell in shameful failures.
Thank you, HSE, for telling us after who won the competition, and the way it did so confuses investors with countless numbers and prejudices. This is not the way to run a university. ..
The hidden world of failure (October 23, 2020)
Survivor deviation (and compounding) in the art world (May 22, 2019)
Survivor deviation on wheels (August 14, 2018)
Lego: a toy for smart investors
Victoria Dobrinskaya, Julia Kirsilova
International Business and Finance Research Volume 59, January 2022
Research shows that investing in Lego is more profitable than gold
The Guardian, December 10, 2021
Toys prove to be a better investment than gold, art and financial securities
HSE University, December 3, 2021