When it comes to structured markets, people often think of the stock market and associate it with long term positive returns. However, I’d argue that the defining feature of a structured market is benchmark-setting. Not every market is suitable for wealth creation, but every market is set up by someone with defined rules, a benchmark, and a distribution of outcomes. Correspondingly, it attracts a particular crowd of people with a particular set of expectations.

In others words, it is a product.

The Stock Market and Casino

Conventional wisdom treats stock markets as the go-to place for building wealth for the vast majority of people. ETF tickers are everywhere in FIRE communities. I agree with the conclusion, not because structured markets have the best opportunities, but because it’s hard to go wrong, as long as it’s the right market.

Take the stock market for example. Passive investing in broad indices has historically delivered solid returns with a reasonable risk premium. There are strong investor protections, even when you use the lowest-cost providers. And the menu of exposures keeps widening, from company shares to just about every diversified slice of the economy you can name, as long as it meets minimum regulatory standards.

In my mind, any market with negative expected returns is mostly a trap. And those markets are arguably more prevalent than genuinely positive-return ones like the stock market.

Casino is the typical example. It attracts people because it offers the illusion of occasional, outsized tail payoffs. It also doubles as an ego booster: simply splashing cash can feel like attention, status, and power, even when the underlying math is quietly working against you.

If a casino is a pure, statistics-based trap, there are other traps that hide behind perceived specialty. They don’t look like gambling at first glance. They look like taste, expertise, or cultural sophistication.

Antique hunting is one. Jade gambling is another. On the surface, they reward knowledge, history, provenance, texture, translucency, and workmanship. In reality, they’re often closer to a casino with extra layers: extreme information asymmetry, unverifiable quality, and prices that can’t be rationalised cleanly. The house edge isn’t math: it’s who can authenticate, who controls the story, and who has liquidity when you want to exit.

The Private Market

Funny enough, as I write it out, private venture investing is terribly similar to a casino or a jade gambling shop. Every bet is framed as taste: unique vision, founder instinct, access to the best people. But the payoff distribution is the same: lots of small losses, a handful of break-evens, and a tiny number of outlier wins that allegedly carry the entire portfolio, only if they could be liquidated on fair terms. And just like a casino, it comes with an ego layer: being “in the game”, dropping names, feeling like having front-row seats to the future. The social and virtue signalling can be half the point.

Whether venture investing as a whole is a trap remains to be seen, though we already know that the performance data is opaque, disclosure is inconsistent, and the incentives to maximise window dressing are strong. But it’s definitely a trap for the vast majority of ordinary people, because the industry actively resists the kind of investor protections and regulatory oversight that exist in public markets. And that isn’t an accident; it serves the purpose of preserving access, fees, discretion and control for the people running the show, which is uncannily similar to how the jade gambling market operates.

It also aligns with what you hear anecdotally: these days, people rarely blow themselves up financially in a meaningful way without getting pulled into shady private investments sold through some middleman.

Having said that, the venture market will most likely continue to mature and become more structured, but it does not automatically mean the return profile for end investors will improve, for the same reason casinos remain a trap on expected returns despite heavy compliance and regulation. At the end of the day, it’s mostly about benchmark-setting. In my opinion, as long as venture remains tied to status, class, virtue signalling, and thrill-seeking, its benchmark return is likely to stay subdued, because a meaningful share of participants simply aren’t there for the returns.

Meanwhile, public markets keep expanding to include more and more of the economy while enforcing minimum standards around disclosure and governance. So I’d think twice before stepping into private markets, especially when there’s a middleman involved.

Final Remark

Structured markets aren’t inherently good or bad. At best, they’re products designed by others, with rules, benchmarks, and a built-in distribution of outcomes.

Some markets are traps for majority of participants. Markets like casinos and jade betting are structured to feed the worst parts of humanity while quietly keeping the expected value negative for the crowd. And the private market requires caution too, to say the least.

The stock market, on the other hand, is broadly fair for most people: transparent pricing, deep liquidity, and investor protections that let ordinary participants compound without needing special access.

Even for fair markets like the stock market, my unpopular take is that the best opportunities rarely live there. Once an opportunity is productised, returns get compressed to the minimum acceptable level for the average participant in the target customer pool while the product creator captures most of the value.

Where do the real opportunities lie?

It’s real life itself. Opportunity isn’t neatly listed like equities. It’s not obvious, unevenly distributed, full of frictions, but that’s exactly why the best edges exist, for every single one of us in real life.

No one says it better than Steve Jobs.

Until next time!