X-Message-Number: 12750
From: 
Date: Mon, 8 Nov 1999 22:10:05 EST
Subject: Investing, Skrecky

Doug Skrecky (#12740) misinterpreted my post, and the suggestions of John de 
Rivaz, about funding your cryostasis through investments. With the best of 
intentions, he also is mistaken in some of his ideas about the markets and 
his apparent guesses about our people.

1. No one advocates "gambling on short term fads." Technology is not a short 
term fad. If you think it is, then forget about cryonics.

2. Whether prudence demands "diversification" and avoidance of "sector" 
investing is a long story, and depends on definitions and context. Everyone 
agrees, for example, that in the long term equities beat bonds; yet in 
special situations and for short periods the reverse may be true. Someone who 
takes "diversification" to extremes will include the kitchen sink and waste 
most of his opportunities. 

3. The notion that the markets are "efficient" is laughable and was never 
taken seriously by real investors. In the first place, if markets were 
anywhere near efficient, you could just throw darts and it wouldn't matter. 
No one can possibly imagine the markets are efficient if he watches them at 
all. Many stocks jump around like crazy for no good reason, often just a 
reaction to some individual's public comment. This doesn't mean investing or 
trading is easy, but it does mean markets are inefficient.

>There is a strong temptation for some non-professional investors to
> over-estimate their own stock picking abilities 

I don't know if Doug was referring here to CI people or just to prospective 
novice investors. "Professional" does not necessarily mean "successful" or 
even "competent," but on the CI Board of Directors are two licensed stock 
brokers, as well as other people with extensive investment and trading 
experience. But my post, on which Doug was commenting, and the suggestions of 
John de Rivaz, did not relate primarily to CI investments, but to the 
prospective private, individual investments of members or prospective members 
hoping to accumulate money to fund a suspension. Nor did my post relate to 
stock picking (individual equities).

As for Doug's suggestion that we buy the journals he mentioned, I hope he 
will forgive a chuckle. Academics (with the usual exceptions) are notoriously 
poor in the actual markets. ("Those who can, do; those who can't, teach; and 
those who can't teach, teach teachers".) One of the biggest fund debacles 
this last year was managed by two Nobel laureate economists!

Once more: John's suggestion was that, to accumulate enough to fund a 
suspension in relatively short order, one could invest periodically in an 
open-end tech fund with a good long term record, or else in a closed-end tech 
or mostly-tech index fund such as QQQ or XLK. This has worked well for many 
years (although QQQ and XLK formally are relatively new funds), and shows 
every indication of continuing to do so. And of course you can always make a 
change if circumstances warrant. (While building your account, use declining 
term life insurance to cover contingencies.)

As to the actual mechanics of choosing the legal vehicle for pledging the 
funds to your cryonics organization, we will have an extended report probably 
within the next couple of weeks. (I have already mentioned one or two options 
currently available, including the CI Revocable Living Trust, which can be 
used in conjunction with a brokerage account; more details will be 
forthcoming.)

Robert Ettinger
Cryonics Institute
Immortalist Society
http://www.cryonics.org

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