Friday, July 4, 2008

Somthing to say for getting old - or just ignoring survival bias

Getting old is better than the alternative.

But Floyd Norris suggests that it seems to be better for your investing.

As I am getting older at the rate of one year per year Floyd's article should cheer me up. But it doesn't.

An article that suggests that older investors are less likely to be caught up in a bubble has a causality problem at its heart.

If you are likely to get caught up in a bubble you are unlikely to STILL be a professional investor by the time you are 50.

The article seems to suggest that age makes you wise.

But the alternative hypothesis is also possible: wisdom that allows you to grow old (and stay in business).

And if that is the case getting older at the rate of one year per year has fewer benefits than I hoped.

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The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author.  In particular this blog is not directed for investment purposes at US Persons.