Comments on: Variance and Investing https://novasync.top/variance/ Life Outside the Box Sun, 13 Jun 2021 07:15:50 +0000 hourly 1 https://wordpress.org/?v=6.7.2 By: Reader https://novasync.top/variance/#comment-3909 Sun, 13 Jun 2021 07:15:50 +0000 https://novasync.top/variance/#comment-3909 In reply to Tynan.

Sure, but that doesn’t translate to other people who have more. That’s what I mean by inter vs intra personal comparison of preferences.

Do I like the color blue more than you like Chipotle? What does that even mean?

]]> By: Tynan https://novasync.top/variance/#comment-3907 Sun, 13 Jun 2021 04:30:24 +0000 https://novasync.top/variance/#comment-3907 In reply to Reader.

I think it’s pretty uncontroversial to say that the marginal value of money decreases as you get more.

]]> By: Reader https://novasync.top/variance/#comment-3905 Sat, 12 Jun 2021 23:42:07 +0000 https://novasync.top/variance/#comment-3905 > If you give five dollars to someone who is starving and standing next to a McDonalds, he can derive a lot of practical utility out of that five dollar bill. If you give five dollars to Jeff Bezos, it has utility approaching zero.

> In your own life, this is also true.

I’d argue these are different, and the first claim is wrong. It seems intuitive and many economists claim that $5 don’t mean as much to a billionaire as to a poor man, but the Austrian school of economics argues this is a nonsensical claim.

You can claim that you prefer $5 to a hamburger, but it doesn’t make sense to say you like $5 more than I like $5. Does it make sense to say you like your grandmother more than I like my grandmother? It’s not wrong, it’s just nonsensical. You cannot compare interpersonal preferences.

You can compare intra-personal preferences – maybe you like your grandmother more than $5.

]]> By: Dan https://novasync.top/variance/#comment-3884 Fri, 11 Jun 2021 18:51:25 +0000 https://novasync.top/variance/#comment-3884 Interesting post.

What is your favorite stats book?

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