Monday, July 25, 2011

Motif investing is a dumb idea

Former Microsoft Exec Raises $20 Million For Motif, An Investment Vehicle For Ideas | TechCrunch

Who are the people (other than the owners) who can benefit from Motif's service? That few people who can predict the future of economically influential outcomes yet are to ignorant to know how to bet on these outcomes. Another complication is that successful trading involves guessing how your expectations are different from the expectations that others have priced into the market. Motif is offering to do the easy stuff for a fee and leave the hard stuff to the people who can't do the easy stuff. Reminds me of FX and option trading brokers who train you how to beet the market, but who are instead talking to a bunch of middle aged mechanics and housewives teaching them how to make millions. Yes it is preposterous and yes it happens all the time. Think or Swim is an example.

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