What do you have invested?

[El_Machinae]

All economics, even.
The psychology of animal behaviour is better understood through the concept of opportunity cost

 

[Mise]

Ooh, do you have an example of that El Mac?

 

[emzie]

Ooh, do you have an example of that El Mac?

I assume he's talking about using game theory to describe animal behaviour, an approach developed by John Maynard Smith. If you'd like, I could start a thread on it in the science forums. It is truly fascinating.

 

[Hygro]

Yeah opportunity cost is the most important thing in economics. The next most important is comparative advantage, simply because it's interesting (and is opportunity cost in action!)

 

[Tani Coyote]

I didn't see anyone hammer this home, you gain the ability to earn a higher return on another stock.

This is true, but by this point, very difficult.

Through out this thread you've talked about how you're the type of person to stoop and pick up a penny. While many pennies do add up to real gains, you're ignoring the other side of the coin where you have to expend both time and energy to pick up that penny. As an example, I placed a penny on the floor slightly out of the path I would take to my kitchen. I then went to my fridge to grab a diet coke, and tried to measure how long walking the extra few steps, stooping, and walking back to my normal path would take. Over 10 trials I averaged ~3 seconds. So 3 seconds = 1 cent profit. That works out to 12 dollars an hour.

Before I got fired for calling a racist customer a... well a name auto censor will prohibit me from relaying... I made 18.90 an hour + benefits. With benefits and after taxes, it worked out to about 17 dollars an hour. So if I spent my time picking up pennies, I actually would have lost 5 dollars. Time is a real investment, not an abstract concept.

Fair points, but jobs don't fall out of the sky. You get some physical activity and make a little spare change. Not as productive as a real job, well of course, but those aren't always available.

Besides. People need jobs more than I do.

In the same sense, if your investment scheme doesn't beat the market, you have lost money. Consider it like this: you make 10% over a year, however the market averages 12% over that time; your gains are due to the drift in the market, not what you personally did. If the market had stayed flat, you would have lost 2% of your money. Now factor in that you spent many hours doing this compared to perhaps 30 minutes it would take to pick a balanced portfolio, that time is money... not to mention the stress.

Actually, I find it exhilirating.

In conclusion, your strategy didn't work.

I'd need to run the numbers to determine if it did or didn't.

Contre makes an excellent point. Time is worth money. I know someone who is making a business out of going around to yard sales and buying particular items, cleaning them up and selling them on Ebay. "Hey I made $50 last week doing that." Except they spent half the week, probably at least 12 hours doing it. So, $4.20(ish) per hour. Either call it a hobby that happens to make money rather than lose it, or stop pretending it is a business and go get a real part-time job. And sorry for the rant, the person doing this annoys me on several levels and not facing financial reality is just one of them.

Well, it's silly to call it a business, yes. It's just a small time venture for some extra cash, kind of like commissions,

Any artist or writer who hopes to make minimum wage or above from their stuff is delusional, and I say that as an artist/writer. To make money like that, you need to sign deals for your work, or find an extremely wealthy patron.

Contre's describing [wiki]Opportunity Cost[/wiki], in case anyone wanted a formal treatment of it.

Opportunity Cost is one of the most important concepts in, well, anything to do with money.

I remember the concept all too well. Compare taking an overtime minimum wage job now(and investing the proceeds) vs. taking a full time student position.

The minimum wage job builds up wealth, but closes many doors for the time being. The full time builds up income opportunities, but saddles you with debt.

 

[LucyDuke]

Contre's describing [wiki]Opportunity Cost[/wiki], in case anyone wanted a formal treatment of it.

Wiki does formal treatments now?

 

[Hygro]

Time to put it to the test!!!!

http://simulator.investopedia.com/Portfolio/?gameid=152650 password is "thunderfall" . Sign up now. Here's the official thread: http://forums.civfanatics.com/showthread.php?t=433286