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Test for yourself, one strategy is called trend following, you follow the trend up and down with the market, it is not a secret... There a lot of strategies tha

by SirLJ 9y ago

Test for yourself, one strategy is called trend following, you follow the trend up and down with the market, it is not a secret... There a lot of strategies that are outperforming the market for years, the best example is probably Renaissance Technologies: https://en.wikipedia.org/wiki/Renaissance_Technologies https://en.wikipedia.org/wiki/Renaissance_Technologies

stouset 9y ago
Better-than-market returns are possible. You, personally being able to beat the market on risk-adjusted returns with any sort of predictability is the part I find difficult to believe. RenTech has a legion of Ph.Ds and billions of dollars at their disposal — advantages I suspect you are not likely to have. And they are only one of a very, very select few who've reliably demonstrated the ability to beat the market.
- SirLJ 9y ago
  Absolutely, I am personally beating the market on a constant basis, it is actually easier when trading 5,6,7 digits account because of liquidity... but that is not important, the important part is that you can do it too, just test few simple trend following strategies against S&P 500 (symbol SPY) for example and you'll see it clearly...
  - stouset 9y ago
    Then start a hedge fund and become a billionaire. Seriously. If what you're saying is true, you essentially have a license to print money. So what's stopping you? Although it's infinitely more like you've just a) been lucky and will revert to the mean, or b) have simply been at a more aggressive point on the risk/reward curve, and have seen returns commensurate with the level of assumed risk (and will likely see losses commensurate with it too). Trend following is just a basic application of technical analysis, which is the farcical notion that you can predict where a stock will go based on what it did yesterday, last week, last month, and last year and looking for patterns. It's essentially numerology applied to the stock market. If it worked, the effect would be priced out of the market by people with orders of magnitude more money and access to the markets to you before you had a chance to make trades based on the information. Good luck to you though.
    - SirLJ 9y ago
      The more I work, the luckier I get :-) Just to clarify few points, trend following is not technical analysis in a sense of chart/pattern reading – maybe it can work for someone, but I have tested a lot of patterns and they do not work for me... the reality is we cannot predict what the weather is going to be tomorrow, let alone the stock market next week. But if you agree that the market is not efficient and trend do emerge, then you can find a quantitative strategy that will let you to follow the rent in up and down markets and make money doing it, you’ll never catch the top or to bottom, but will catch the majority of the trend in the middle... Why bother opening a hedge fund, look for investors and clients – just the regulatory paperwork would be nightmare, when I am leaving comfortable life, plan to travel the world and will leave a nice "lifestyle business" to my kids... Let me tell you what, why not take and read one of the Ed Thorp books, maybe it will inspire you to look at the markets in t a different way – I think it is a great risk reward, your are risking few hours from your time and the potential reward can be life changing...

by SirLJ 9y ago

stouset 9y ago

Better-than-market returns are possible. You, personally being able to beat the market on risk-adjusted returns with any sort of predictability is the part I find difficult to believe. RenTech has a legion of Ph.Ds and billions of dollars at their disposal — advantages I suspect you are not likely to have. And they are only one of a very, very select few who've reliably demonstrated the ability to beat the market.

SirLJ 9y ago
Absolutely, I am personally beating the market on a constant basis, it is actually easier when trading 5,6,7 digits account because of liquidity... but that is not important, the important part is that you can do it too, just test few simple trend following strategies against S&P 500 (symbol SPY) for example and you'll see it clearly...
- stouset 9y ago
  Then start a hedge fund and become a billionaire. Seriously. If what you're saying is true, you essentially have a license to print money. So what's stopping you? Although it's infinitely more like you've just a) been lucky and will revert to the mean, or b) have simply been at a more aggressive point on the risk/reward curve, and have seen returns commensurate with the level of assumed risk (and will likely see losses commensurate with it too). Trend following is just a basic application of technical analysis, which is the farcical notion that you can predict where a stock will go based on what it did yesterday, last week, last month, and last year and looking for patterns. It's essentially numerology applied to the stock market. If it worked, the effect would be priced out of the market by people with orders of magnitude more money and access to the markets to you before you had a chance to make trades based on the information. Good luck to you though.
  - SirLJ 9y ago
    The more I work, the luckier I get :-) Just to clarify few points, trend following is not technical analysis in a sense of chart/pattern reading – maybe it can work for someone, but I have tested a lot of patterns and they do not work for me... the reality is we cannot predict what the weather is going to be tomorrow, let alone the stock market next week. But if you agree that the market is not efficient and trend do emerge, then you can find a quantitative strategy that will let you to follow the rent in up and down markets and make money doing it, you’ll never catch the top or to bottom, but will catch the majority of the trend in the middle... Why bother opening a hedge fund, look for investors and clients – just the regulatory paperwork would be nightmare, when I am leaving comfortable life, plan to travel the world and will leave a nice "lifestyle business" to my kids... Let me tell you what, why not take and read one of the Ed Thorp books, maybe it will inspire you to look at the markets in t a different way – I think it is a great risk reward, your are risking few hours from your time and the potential reward can be life changing...