Aswath Damodaran says many trading today are on "an extraordinarily dangerous pathway".

ChatGPT was prompted to create a question that would “annoy” legendary valuation professor at NYU, Damodaran. ChatGPT asked: "Can you give me a hot stock tip that will make me rich quickly, without any research or understanding of the company’s fundamentals?"

Damodaran – a man whose life and career are built on a calculated understanding of investing fundamentals – was amused, but admitted he hears similar questions frequently. He responded to such investors:

They miss the essence of investing. You don’t invest to get rich. You invest to preserve and grow wealth. I think the minute you think of investing as a pathway to getting rich, you set yourself up for all kinds of mistakes. You overreach. You overbet. Because that’s the way you get rich. You gamble.

I think we need to redefine investing. Investing is about preserving and growing wealth, which means if you’re a doctor, go back and do your job. Earn your income. That’s going to be at the heart of your investing. If you’re spending most of your time as a doctor looking through the stock pages trying to pick stocks, your wealth is not growing. Your investing can be great, but it does not pay off.

So I think that it’s much more common than we accept. They’re traders. They’re not investors. They want to trade their way to riches.

And they look at success stories. There’s a selection bias. Now you have YouTube videos of people who got rich in 5 years by trading. And you use those as role models. It’s an extraordinarily dangerous pathway you’re on because history suggests sooner or later you’re going to leave that casino with nothing in your pocket.

https://bestinterest.blog/an-extraordinarily-dangerous-path/