Stock Market Investing: How Much Risk Is Too Much?

First I’d like to say that I was very much pleased with your presentation and details on shiur 566 regarding investing. The speakers were knowledgeable in the details of investing and were able to articulate the nuances of the various products well and frame them within a halachic perspective.

I’d like to provide one important clarifying note on digital assets – Bitcoin, Ethereum, Solana, others…

1. Purchasing these assets shouldn’t be looked at as a gamble nor a Yishuvo shel Olam challenge – rather one should be looking at each individual digital asset as its own unique technology in its own right. Framing it that way enables you to better differentiate between the assets as opposed to focusing in on the hype around them.

2. When acquiring Bitcoin vs. Ethereum vs. Solana an individual in a way is purchasing access to the underlying digital rails and transaction mechanism and by proxy are making a decision as to which one of these technologies will have more adoption and more use in the future. Using this angle then frames the discussion similarly to that of buying a new line of fashion clothes with the hopes that it will be the “hot item” in the upcoming season.

3. There are fundamental differences between these technologies, with Bitcoin arguably representing the 1st generation of adoption (and its limitations) while newer platforms like Ethereum and Solana representing a much more advanced, and sophisticated iteration.

The above isn’t to argue that one should or shouldn’t be making those investments, even though I used to head engineering for a crypto focused company, I don’t believe that even a sophisticated investor should be engaging in this area without having deep, well researched understanding of the underlying technology. Just like one shouldn’t buy a stock on a tip, one shouldn’t be investing in digital assets without a clear, deep understanding of what it is they are investing in.

I’m a big fan of the show and especially appreciate the willingness to wade into controversial topics, I believe that’s true leadership. I was excited when I saw the show on investing. I’m an investor myself and thought the shiur was a great high level review of the topic. There was one area I felt needs to be emphasized when it comes to options contracts. R’ Rapp got into the sugya of options contracts, and whether they’re an agreement to agree and subject to asmachta. I’m not arguing that. The problem is how options contracts are traded and how easily and accesible it’s become. Anyone can open a Robinhood account and trade options for no commission. That’s led to gambling in the options market itself. On the tzad options are mutar as a trading product, I don’t think all are mutar altz gambling. Buying in-the-money calls on index funds and blue-chip coorporations, which merely allows you increased leverage, is very different than trading 0 days-to-expiry S&P options. Those short term contracts are no better, and likely worse in terms of returns, than sports betting. Even though its all the same tool called buying/selling options. But that’s not the end of the story. If I own plenty of shares of the S&P and want a short term downside hedge, buying those same 0 day to expiry contracts could be considered a hedge and in my opinion oisek b’yishuvu shel olam. My point is that I felt the shiur missed the behavioral problems with options as opposed to just the legal definition. Keep up the great work