https://hackerpaper.kaipfister.de/p/1101.4548/Collected HN comments and submissions linking this paper.enMon, 02 Nov 2026 11:16:22 GMThttps://news.ycombinator.com/item?id=26375467urn:hackerpapers:mention:1101.4548:26375467Sun, 07 Mar 2021 12:48:41 GMT<p>You may have seen this already: https://arxiv.org/abs/1101.4548 Funny stuff. They predict that in aggregate 100% of the wealth is invested in stocks and investing more than that would be suboptimal: the optimal leverage is 1. They &quot;submit the hypothesis to a rigorous test&quot; and find that the optimal leverage for the S&amp;P 500 is around 1, given its volatility. There is a small problem with their rigorous test. They forgot to include dividends: &quot;a real investment in the S&amp;P500 outgrew federal deposits at only 2.0% p.a&quot;. Including dividends would bring the optimal leverage to 2 or 3. But that&#x27;s…</p><p><a href="https://hackerpaper.kaipfister.de/p/1101.4548/">Paper and discussion history</a>. A mention is not an endorsement.</p>q-fin.GN