Man, I still think trying to buy and sell individual stocks is -EV for you. You’d be better off investing that money in poker, in poker you have an edge. Individual stocks? I don’t think any of us can possibly have an edge. Maybe we can get lucky, but that’s about it.
Edit: An edge against just owning index funds. Not an edge in general.
Value investing is a viable strategy it’s just not sexy and hard work. It also gets harder and harder to do the more money you have under management although honestly that doesn’t even really start to be a thing until you’ve got ~10M if you’re being diversified at all.
Just because something isn’t viable for finance bros with the worst incentives imaginable (and remember it’s really their insane fees that make active funds super super stupid) doesn’t mean a strong hobbyist that is generating their own ideas from scratch can’t beat the market.
I wanna be clear that the vast majority of people invest like the dumbest degenerate gamblers rather than grinders who are trying to squeak out an edge.
I’ve consistently beaten the S&P mostly through not owning any actually stupid shit. It definitely wouldn’t be worth the effort if I didn’t enjoy it.
The reality is when you’re buying stuff that makes sense at the price it’s selling for you tend to do better than the market return where a lot of the components very much don’t make any sense. Also if everyone did this I would probably lose a lot of the lower hanging fruit I find.
I think there’s an argument that right now my hourly is higher at poker than it is spending time on researching investments, based on the size of investments. But it’s closer than I thought it would be, so far. (Calculating the amount I’ve beaten the S&P by divided by an estimate of how much time I’ve spent researching stocks.)
However, the stock market returns compound, and I add more into my IRAs each year, so eventually it’s going to be the other way around.
There’s also only so much I can invest in poker. Eventually I get to the biggest available game I want to play. Plus, stock market returns are much closer to passive income. They’re making me money while I’m at the table, while I’m sleeping, etc.
I definitely think people can beat the S&P with a value investing approach up until they’re managing too much money to be able to get that edge, as a lot of it is in small caps. Whether or not I’m one of those people is still TBD, but I think I am. I’m probably around halfway to having a sample size that’s good enough to make that claim, but I haven’t done the math yet because I know I’m still a ways off from making enough trades to have a good enough sample.
One thing that I think bodes well for me in qualitatively analyzing my results so far is that I really haven’t had any dumb luck where something I hold skyrockets for some random reason that I didn’t anticipate.
For example, my PKX thesis was that it was undervalued already for its core business, and that the potential their other businesses had with batteries/EVs gave a strong potential upside catalyst to unlock the value. It just shot up 71% in two weeks because of their projections on lithium and the market reaction to them.
This is part of it too, I actually enjoy it. Parts of it are extremely tedious and annoying, but when you find something it’s a lot of fun and when the payoff hits it’s rewarding.
Don’t even care if it’s real. Holy shit
https://twitter.com/rampcapitalllc/status/1684010147130093572?s=46&t=XGja5BtSraUljl_WWUrIUg
But how much on candles?
Holy shit on the personal trainer budget. Also hopefully 120k a year buys a nanny that can give their kids a normal attachment style because holy shit.
How is their take home so low, it should be at least $125k?
$2200/month on cars and thats to LEASE lol suckers
Are they each seeing a personal trainer every day of the week? Or do personal trainers make $500 an hour or something?
Had some sort of “cousin” who was personal trainer in big city and I think some clients were paying about that at times when economy was hot. I guess money just becomes mostly irrelevant for these people so they like eh why not pay a couple extra hundred for this guy my friend liked
That may come in handy when I hit the Megamillions next week!
Not having any exposure to SNAP definitely helps my returns tomorrow lol.
WTF is SNAP?
snapchat, the app that killed itself with a massive redesign circa 2016 and even young people don’t really use it anymore. it’s good for cheating because it deletes chat messages after they’re read. bad for cheating because sometimes they release major patches that show your exact location to your entire network.
funny enough, I like the camera part of the app so much I use it instead of the default phone camera.
If it’s more than 2-3 years old and the manager is good it’s either closed to new investors or in the process of becoming a family office.
As good of a deal as the hedge fund manager is getting it’s not a very good deal if they’re actually an elite trader of some kind. An elite trader wants to self fund their hustle ASAP so they can keep 100% of the money. If they found a trade that has such a large potential size that they can take outside money it shouldn’t take too terribly long for them to have enough money to cap the trade with their own money.
And it really irritates me when people instantly mention Rentech or Bridgewater as a counter to my argument. Rentech is a glorified family office that only takes employee money. Bridgewater, which has regressed to the mean sharply since Dalio started trying to leave wasn’t exactly the easiest place to put your money and had basically built the entire strategy around playing in such deep games that they could put an absurd stack into play. And for many many years it worked. But almost the entire rest of the industry were like those colorful snakes pretending to be the really colorful poisonous snake. Those are pretty much the only two hedge funds that ever consistently generated returns to investors that made the fees make sense if you squinted at them… and one of them is just a family office that had to include more people because their style really does require a lot of individual contributors to keep the machine spitting out money… and investor relations isn’t hard when all the investors work there, or are pretending to be wallpaper in an attempt to avoid getting their money back.
Most of the rest were crooks who started out trading on insider information as a way of life, but then realized that if they called themselves quants they could just skip to scamming the investors without having to irritate the SEC. Their biggest and most important trait being their close proximity to the people who allocate retirement funds for various large organizations. Marketers selling themselves as traders with an edge.
There are absolutely traders in the world with edges, but they aren’t sharing them with anyone. That’s not how that works. It simply makes no sense for any significant duration.
There’s a lifecycle to a successful hedge fund manager and it comes down to what they’re good at. If they’re great at trading they become a family office because why put up with investor bullshit to share the fruit of your labor with them for absolutely no reason. If you’re good at sales and marketing you take your initial (lucky) results and parlay it into more assets under management.
Yeah I’d never put money in a hedge fund lol. Never. I 1000% believe there are people out there who are better than me at valuing financial products… there’s NOBODY who is 2 & 20 better than me. That’s impossible without an actual cheat code. And if you had an actual cheat code you wouldn’t be asking for my money would you?
I genuinely think the 2/20 fee structure is a bit like spotting the other player a rook in a chess game. It’s that insulting. I mean it’s borderline impossible to beat the S&P with a 2/20 fee structure and that’s an option for me so…
I read something in Forbes that said in the last ten years, there were something like 19 newly minted billionaires in hedge funds.
They were all owners of hedge funds. Not investors of hedge funds.
Tells you all you need to know.
State legislatures should absolutely pass laws that all public retirement funds not be invested in hedge funds. You have some dude making $200k allocating tens or hundreds of billions, doesn’t take a genius to figure out they’re going to get bribed to put the cash in high fee bullshit.
I wonder who would pay the lobbyists that would make sure that never ever saw the light of day?