Or when making money became harder.

Amazing the number of people I personally know who took 1 year of day trading to be the “norm” and made big life decisions based on their results. From quitting good jobs to buying houses they can’t afford, all because they made big money in 2021 and thought they could keep repeating it every year.

Options trading in particular is really addicting, like gambling. I’ve had periods where I was completely sucked in, looking at charts and news all day.

I will admit I’ve had thoughts in the past of “I should just quit my job and do this” without any practical consideration as to how sustainable it would be. Not because I thought I would be rich, just because I wanted to trade all day! It’s kind of like being addicted to an MMO lol

+1

I talked with a “professional” day trader who basically said “write down your strategy on a piece of paper pre-market and the. Paper trade that strategy. If it doesn’t match what you were doing then you weren’t acting like a professional, you were a gambler”.

I did that too and you’re spot on about how addictive it can be. But I looked at my wins and realized that I had no real thesis and was essentially gambling. Had to quit at that point.

What type did you do?

This happened in 1998-1999 too. People got online trading accounts, did great and then decided to try to invest for a living.

You should not take investment advice from people who have been doing it less than a decade. It takes time to sort out the lucky from the smart.

Unless you're going to do it for living and really invest hard into educating yourself, I don't think you should also take the investment advice from people who have been doing it for more than a decade, unless the advice is "buy index funds and HODL" (I maybe exaggerate a bit, but boiled down to the essence that'd be it). For a common person that doesn't plan to make a career out of it and spend a lot of time honing one's skills, daytrading is rarely going to pay off, IMHO. You can do it for fun, there are more expensive hobbies probably, but as a means to support yourself in the old age... well, you might get lucky. Or not.

if you've been doing it for more than a decade, hopefully that is the advice you will share

Heh I made 30% trading! Of course had I just let it ride in an index fund I’d’ve made 50+%…

Nah a lot of the tech and meme plays were up hundreds to thousands percent returns. Of course they were hit the hardest in the down turn, but the money making potential was pretty insane.

I would even argue that a decade isn't necessarily enough time. The decade in question might have been the 1990s.

Or the 2010's.

To any one person, sure. But, as the saying goes, "None of us is as dumb as all of us."

Once you start move into the realm of group decisionmaking based on hypothetical future demand for $OUR_WORLD_CHANGING_PRODUCT, positivity culture starts to take over. Plenty of people in the room where the decision is made may be thinking, "But what if this is a passing fad and people don't really love our product in any sort of durable way," but nobody wants to be the one to actually say it.

I would even go so far as to say that those whose temperament would allow them to say something like that out loud in the boardroom generally don't get promoted into the kinds of positions that get you invited to boardroom meetings.

Positivity culture exists because there’s no real downside for the people exuding it. You swing for the fences and the losses and layoffs are someone else’s problem. Most decent people might find such decision making distasteful and that excludes them from leadership.

It's sort of like optimistic concurrency. Sure, transactions straight-up get killed on a regular basis. But if you make transactions cheap things that are easily replaceable, then the overall system might still benefit.

I think that all you really need to do to translate the principle to business culture is replace the word "transaction" with "someone's career".

It is also because executives operate on the long tail of a pareto distribution. You get there by capitalizing on a large number of successful gambles. With few exceptions, you don't get their without beating the odds several times in a row.

And once even throwing darts to pick stocks stopped producing big gains.

The same thing basically happened in the run-up to dot-bomb. It was really easy to make book with day-trading in 1999 or so. See also crypto.

Hindsight's 20/20? Why would we feel sure that people wouldn't keep up with habits they picked up during COVID? That seems like it could have been similarly likely to me -- someone picks up day trading, gets hooked, and now it's a regular habit.

Well, you'd ask the question "why weren't they doing it before?". If the answer is "they didn't know about it", you might expect them to keep doing it. But not otherwise.

Day trading has had a lot of popular awareness for a long time.

Even if you know something exists, you might just have never tried it for some reason until something causes you to, at which point you might realize you enjoy it.

E.g., I got a bike over COVID, found I liked biking a lot, and have been doing it a lot more now.

That's just one data point though, and the issue is whether or not things would stick for the population as a whole.

In a related sense, Peleton did really well during the pandemic and now they're doing really poorly.

From a user perspective, day trading is very similar to online poker or other gambling activities. The exception being that everyone wins sometimes, and everyone loses other times.

Anecdotally various betting games had a similar growth curve. People rush in when it’s easy, and then rush out once it’s hard.

Day trading has all the meaning and fulfillment of cigarette smoking and slot machines, but with none of the addictive chemicals or flashing lights. So it's not surprising that people didn't hold onto the habit once there were better alternatives.

Matt Levine called this the "Bored Markets Hypothesis" at the time. Seemed pretty obvious both then and now in hindsight.