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I wouldn't be so diffident. In my experience, Wall Street for example doesn't understand tech that much. E.g. exactly a year ago, Nvidia had a three month dip.

I wouldn't be so diffident. In my experience, Wall Street for example doesn't understand tech that much. E.g. exactly a year ago, Nvidia had a three month dip. After I listened on the earnings call, all the WS people were asking "why are people still buying gpus and why is it accelerating". They didn't know about ml, gaming and crypto. Wall Street is too oriented on the next 3 months, not the next year.

useranme 9y ago
If one has the ability to trade when the price moves, one makes more by selling Nvidia in the beginning of a dip and buying it on the uptrend. Wall Street not understanding tech that much isn't as important if Wall Street can react to the price change.
- matt_wulfeck 9y ago
  OPs point is still good though. Retail investors can often have “one-up” on the industry. Investing into that edge can be a real advantage.
  - sgt101 9y ago
    The OP is deluded. Yes, on the earnings call they're not sitting there saying "guys, girls, Nvidia stock is going to be driven up by ML" but that's not because they don't know, it's because there is no value at all in them disclosing this. Everyone on the call knows it, what they are trying to do is to shake lose some info on one of the cashflow facts that can then be used by an activist to squeeze the Nvidia board into cutting investment and issuing a dividend. If you think you have an edge on people who are paid to do a job I suggest that you take up cage fighting - it will provide a set of instructive lessons on the limits of amateur capability. Some people get lucky, most people get poor, everyone else invests in indexes.
    - adamnemecek 9y ago
      Wall Street might be aware of ml but they underestimated how much of an impact it would have on GPU sales. > If you think you have an edge on people who are paid to do a job As I said, they are too concerned with the next three months, not the next two years. Also, like how many people on wall street specialize in nvidia analysis? And I do think that it's possible for an amateur to beat a professional under certain circumstances. Also please listen to the earnings call. It should be the Q2 one.
  - useranme 9y ago
    I used to believe the same thing. Then I came across these two posts that made me realize one can make a more by day trading: https://bitcointalk.org/index.php?topic=60501.0 https://bitcointalk.org/index.php?topic=60501.0 https://forum.gekko.wizb.it/thread-100.html https://forum.gekko.wizb.it/thread-100.html
    - shortoncash 9y ago
      You can make a ton day trading, but the edges don't last long. I've seen several cycles of this, and it's worse than knowing the latest javascript fad. The markets change, approaches change, and techniques change. On a positive note, you really only need to hammer on an edge and succeed once to buy more than enough time to develop the next one.
- sgt101 9y ago
  But doesn't someone else have to buy on the dip and sell on the uptrend for that to work? Who would be doing that? Oh, my pension fund just called! Ahh....
wyager 9y ago
Look up the implied correlation index. Not too hard to grok with a bit of stats background. Some parties argue that the ICI is an indicator of how much fundamental analysis Wall Street is doing - high ICI, insufficient fundamental analysis. I think this is a somewhat plausible argument. Apparently the ICI has been high in the last few years - supposedly suggesting relatively little money doing fundamental analysis. Anyway, this is good for you, bad for Wall Street; if you’re an educated investor and you have some industrial insight, it might be worth investing some of your money on opportunities that Wall Street hasn’t picked up on (like Bitcoin, a few years ago).
- adamnemecek 9y ago
  I'll check it out. Do you have any favorite books on this topic?
thesumofall 9y ago
Not really my experience with other ECs. The analysts typically cover that particular firm already since many calls and have a good understanding of the industry and what matters. The question you gave as an example does not necessarily imply that the person asking doesn’t know the answer. They might have already asked the same question since several calls and might be interested if the wording of the answer changes. Or they might be interest if the answer may include any actionable numbers
- adamnemecek 9y ago
  Correct, but I dont think that they really understand the fundamentals. Or like be able to answer the question "what are the odds of the industry moving away from nvidia to someone else"?
  - maksimum 9y ago
    > I dont think that they really understand the fundamentals (A) the fact that the analyst you're talking about is paid for their opinions and you're (most likely) not, means that with high probability you're wrong. (B) what's the utility of assuming other professionals are dumb, and building an investment strategy that will work against dumb professionals?
    - adamnemecek 9y ago
      I, as an investor, am paid for my position.
mbesto 9y ago
Sorry, but this is an extremely myopic take on financial markets. > They didn't know about ml, gaming and crypto. Or they do and they ask those questions to see if the company selling those products understand how important the markets are. I work in a profession (due diligence) where asking the simple questions (e.g. why do your GPUs need fans) is far more important than the complex ones (e.g. what is the thermal resistance threshold before a chip melts?). People are pretty harsh on MBA types on HN, but they aren't stupid people; in fact, usually the opposite. > Wall Street is too oriented on the next 3 months, not the next year. So then why are Facebook, Amazon, Netflix and Google PE Ratios so ridiculously high? Lastly, if you're so confident about your assertions, this is a great example of where you can truly "putting money where your mouth is".
- kurthr 9y ago
  A myopic but quite profitable take on financial markets would be ms high-speed trading. It's actually much easier for analysts to get quarter by quarter financial information from companies' customer/supplier and frontrun the stooges who listen to earnings calls, but you don't have to guess at business fundamentals. If you're buying from pure DD, you'd either better know something special about the targets financial situation, know some synergy or externality you can exploit, or know the business better than management (be careful, sijnce that's often only possible because their MBAs are ignorant). You're looking for a fool, and if you can't spot him, it's you. Why are the P/Es of FANG so high? Because the market hopes they are monopolies.
  - mbesto 9y ago
    > If you're buying from pure DD What does this mean exactly? > You're looking for a fool, and if you can't spot him, it's you. Ok? > Because the market hopes they are monopolies. Which implies they aren't just looking at quarterly performance....
    - deleted 9y ago
      [deleted]
    - 9y ago
wbl 9y ago
They know. They want to know if the management knows.
antisthenes 9y ago
This is a great case in support of the comment you're replying to. You have superior knowledge of 1 particular company because you're operating in your domain of expertise. An average consumer will have no idea what Nvidia is, what they do, and why they should invest in it instead of index funds.
madengr 9y ago
I bought $2k of NVDA last week, the day before the earnings call. After watching Jensen Huang's CES keynote, and experiencing how bad AMD GPUs are, I figure it was a safe bet. The complexity of GPUs (i.e Volta with it's 22B transistors) and the required software is getting to the point I think only one player will emerge. It won't be AMD. The Volta based automotive processor they showed off at CES is pretty impressive. Also bought GM. They seem to know what they are doing with EVs, and I'll bet them over Tesla. GM also pays a decent dividend.
- greenknight 9y ago
  Objectively, what makes the AMD GPU's bad?
  - HappyRobot 9y ago
    Power efficiency. In terms of price and performance, they can compete with Nvidia at the cost of power efficient chips. This might also mean that the the architecture might have less growth potential than Nvidia's. https://www.anandtech.com/show/11717/the-amd-radeon-rx-vega-64-and-56-review/20 https://www.anandtech.com/show/11717/the-amd-radeon-rx-vega-...
  - madengr 9y ago
    Buggy drivers. I was driven nuts over January with an RX-580 in my sons computer. Replaced it with a GTX-1060 which just plain works. Zero issues. The RX-580 was a nightmare. Seems AMD doesn't have the resources to produce quality software, much less R&D into new fields such as Nvidia. Nvidia is not just targeting their GPUs for automotive, but addressing the issues of reliability and safety in that environment. That's a lot of effort. If AMD can't write a driver that does not crash, there is no way in hell they will compete in AI where safety is a concern.
    - lostmsu 9y ago
      I think you need data, not anecdata. I had the opposite issue. I had no problem playing GTA 5 on AMD, but with NVidia I couldn't go past some mission because the same PC would hang on me.
tlogan 9y ago
I think Wall Street is only place where laymen are convinced they know more than professionals. You will not see that in medical profession. But, on the other hand, trading professionals need retail investors to think that they know better then professionals.
- ljf 9y ago
  Have you not heard of the antivax conspiracy people? People often think they know better that others. That said I knew of a person working as a trader who was one a team of 20 young guys taken on fresh from uni - at the end of the year the company sacked the 18 guys who lost money and told all their clients about the 2 whizz kids who had just had an amazing year. If the professionals all knew so much I'm not sure why those 18 people would have failed to turn a profit.
  - pbhjpbhj 9y ago
    That's awesome: I wonder how far you'd get by starting a trading team of 1000 (shell companies!?), trading for 5 years and then marketing "our trading group of 5 have made an inflation-busting, above market average profit for the last 5 years!". Would people throw money at you?
    - tjalfi 9y ago
      You have described mutual funds. See the Mutual Funds section of [0]. [0] http://philip.greenspun.com/materialism/money http://philip.greenspun.com/materialism/money
- jfoutz 9y ago
  I disagree. The entire anti-vaccine movement is a good example in the medical profession. People refuse to hire lawyers. For any profession, i'm pretty sure i can find you a crackpot who is convinced they know more than the pros.
- adamnemecek 9y ago
  The two aren't comparable because one is very probabilistic in nature, the other one isn't. Also medicine doesn't change as much as the market. The fundamental difference is that trading is partially an art. Medicine is too, but like two hedge fund managers will have pretty different outcomes, but two surgeons will have similar outcomes.
deleted 9y ago
[deleted]
ww520 9y ago
The 3 month dip a year ago was justified. NVDA's revenue cycle is such that the forth quarter holiday season rakes up huge amount of sales. The following 1st quarter is in a slump.

useranme 9y ago

If one has the ability to trade when the price moves, one makes more by selling Nvidia in the beginning of a dip and buying it on the uptrend. Wall Street not understanding tech that much isn't as important if Wall Street can react to the price change.

matt_wulfeck 9y ago
OPs point is still good though. Retail investors can often have “one-up” on the industry. Investing into that edge can be a real advantage.
- sgt101 9y ago
  The OP is deluded. Yes, on the earnings call they're not sitting there saying "guys, girls, Nvidia stock is going to be driven up by ML" but that's not because they don't know, it's because there is no value at all in them disclosing this. Everyone on the call knows it, what they are trying to do is to shake lose some info on one of the cashflow facts that can then be used by an activist to squeeze the Nvidia board into cutting investment and issuing a dividend. If you think you have an edge on people who are paid to do a job I suggest that you take up cage fighting - it will provide a set of instructive lessons on the limits of amateur capability. Some people get lucky, most people get poor, everyone else invests in indexes.
  - adamnemecek 9y ago
    Wall Street might be aware of ml but they underestimated how much of an impact it would have on GPU sales. > If you think you have an edge on people who are paid to do a job As I said, they are too concerned with the next three months, not the next two years. Also, like how many people on wall street specialize in nvidia analysis? And I do think that it's possible for an amateur to beat a professional under certain circumstances. Also please listen to the earnings call. It should be the Q2 one.
- useranme 9y ago
  I used to believe the same thing. Then I came across these two posts that made me realize one can make a more by day trading: https://bitcointalk.org/index.php?topic=60501.0 https://bitcointalk.org/index.php?topic=60501.0 https://forum.gekko.wizb.it/thread-100.html https://forum.gekko.wizb.it/thread-100.html
  - shortoncash 9y ago
    You can make a ton day trading, but the edges don't last long. I've seen several cycles of this, and it's worse than knowing the latest javascript fad. The markets change, approaches change, and techniques change. On a positive note, you really only need to hammer on an edge and succeed once to buy more than enough time to develop the next one.
sgt101 9y ago
But doesn't someone else have to buy on the dip and sell on the uptrend for that to work? Who would be doing that? Oh, my pension fund just called! Ahh....

wyager 9y ago

Look up the implied correlation index. Not too hard to grok with a bit of stats background. Some parties argue that the ICI is an indicator of how much fundamental analysis Wall Street is doing - high ICI, insufficient fundamental analysis. I think this is a somewhat plausible argument. Apparently the ICI has been high in the last few years - supposedly suggesting relatively little money doing fundamental analysis. Anyway, this is good for you, bad for Wall Street; if you’re an educated investor and you have some industrial insight, it might be worth investing some of your money on opportunities that Wall Street hasn’t picked up on (like Bitcoin, a few years ago).

adamnemecek 9y ago
I'll check it out. Do you have any favorite books on this topic?

thesumofall 9y ago

Not really my experience with other ECs. The analysts typically cover that particular firm already since many calls and have a good understanding of the industry and what matters. The question you gave as an example does not necessarily imply that the person asking doesn’t know the answer. They might have already asked the same question since several calls and might be interested if the wording of the answer changes. Or they might be interest if the answer may include any actionable numbers

adamnemecek 9y ago
Correct, but I dont think that they really understand the fundamentals. Or like be able to answer the question "what are the odds of the industry moving away from nvidia to someone else"?
- maksimum 9y ago
  > I dont think that they really understand the fundamentals (A) the fact that the analyst you're talking about is paid for their opinions and you're (most likely) not, means that with high probability you're wrong. (B) what's the utility of assuming other professionals are dumb, and building an investment strategy that will work against dumb professionals?
  - adamnemecek 9y ago
    I, as an investor, am paid for my position.

mbesto 9y ago

Sorry, but this is an extremely myopic take on financial markets. > They didn't know about ml, gaming and crypto. Or they do and they ask those questions to see if the company selling those products understand how important the markets are. I work in a profession (due diligence) where asking the simple questions (e.g. why do your GPUs need fans) is far more important than the complex ones (e.g. what is the thermal resistance threshold before a chip melts?). People are pretty harsh on MBA types on HN, but they aren't stupid people; in fact, usually the opposite. > Wall Street is too oriented on the next 3 months, not the next year. So then why are Facebook, Amazon, Netflix and Google PE Ratios so ridiculously high? Lastly, if you're so confident about your assertions, this is a great example of where you can truly "putting money where your mouth is".

kurthr 9y ago
A myopic but quite profitable take on financial markets would be ms high-speed trading. It's actually much easier for analysts to get quarter by quarter financial information from companies' customer/supplier and frontrun the stooges who listen to earnings calls, but you don't have to guess at business fundamentals. If you're buying from pure DD, you'd either better know something special about the targets financial situation, know some synergy or externality you can exploit, or know the business better than management (be careful, sijnce that's often only possible because their MBAs are ignorant). You're looking for a fool, and if you can't spot him, it's you. Why are the P/Es of FANG so high? Because the market hopes they are monopolies.
- mbesto 9y ago
  > If you're buying from pure DD What does this mean exactly? > You're looking for a fool, and if you can't spot him, it's you. Ok? > Because the market hopes they are monopolies. Which implies they aren't just looking at quarterly performance....
  - deleted 9y ago
    [deleted]
  - 9y ago

wbl 9y ago

They know. They want to know if the management knows.

antisthenes 9y ago

This is a great case in support of the comment you're replying to. You have superior knowledge of 1 particular company because you're operating in your domain of expertise. An average consumer will have no idea what Nvidia is, what they do, and why they should invest in it instead of index funds.

madengr 9y ago

I bought $2k of NVDA last week, the day before the earnings call. After watching Jensen Huang's CES keynote, and experiencing how bad AMD GPUs are, I figure it was a safe bet. The complexity of GPUs (i.e Volta with it's 22B transistors) and the required software is getting to the point I think only one player will emerge. It won't be AMD. The Volta based automotive processor they showed off at CES is pretty impressive. Also bought GM. They seem to know what they are doing with EVs, and I'll bet them over Tesla. GM also pays a decent dividend.

greenknight 9y ago
Objectively, what makes the AMD GPU's bad?
- HappyRobot 9y ago
  Power efficiency. In terms of price and performance, they can compete with Nvidia at the cost of power efficient chips. This might also mean that the the architecture might have less growth potential than Nvidia's. https://www.anandtech.com/show/11717/the-amd-radeon-rx-vega-64-and-56-review/20 https://www.anandtech.com/show/11717/the-amd-radeon-rx-vega-...
- madengr 9y ago
  Buggy drivers. I was driven nuts over January with an RX-580 in my sons computer. Replaced it with a GTX-1060 which just plain works. Zero issues. The RX-580 was a nightmare. Seems AMD doesn't have the resources to produce quality software, much less R&D into new fields such as Nvidia. Nvidia is not just targeting their GPUs for automotive, but addressing the issues of reliability and safety in that environment. That's a lot of effort. If AMD can't write a driver that does not crash, there is no way in hell they will compete in AI where safety is a concern.
  - lostmsu 9y ago
    I think you need data, not anecdata. I had the opposite issue. I had no problem playing GTA 5 on AMD, but with NVidia I couldn't go past some mission because the same PC would hang on me.

tlogan 9y ago

I think Wall Street is only place where laymen are convinced they know more than professionals. You will not see that in medical profession. But, on the other hand, trading professionals need retail investors to think that they know better then professionals.

ljf 9y ago
Have you not heard of the antivax conspiracy people? People often think they know better that others. That said I knew of a person working as a trader who was one a team of 20 young guys taken on fresh from uni - at the end of the year the company sacked the 18 guys who lost money and told all their clients about the 2 whizz kids who had just had an amazing year. If the professionals all knew so much I'm not sure why those 18 people would have failed to turn a profit.
- pbhjpbhj 9y ago
  That's awesome: I wonder how far you'd get by starting a trading team of 1000 (shell companies!?), trading for 5 years and then marketing "our trading group of 5 have made an inflation-busting, above market average profit for the last 5 years!". Would people throw money at you?
  - tjalfi 9y ago
    You have described mutual funds. See the Mutual Funds section of [0]. [0] http://philip.greenspun.com/materialism/money http://philip.greenspun.com/materialism/money
jfoutz 9y ago
I disagree. The entire anti-vaccine movement is a good example in the medical profession. People refuse to hire lawyers. For any profession, i'm pretty sure i can find you a crackpot who is convinced they know more than the pros.
adamnemecek 9y ago
The two aren't comparable because one is very probabilistic in nature, the other one isn't. Also medicine doesn't change as much as the market. The fundamental difference is that trading is partially an art. Medicine is too, but like two hedge fund managers will have pretty different outcomes, but two surgeons will have similar outcomes.

deleted 9y ago

[deleted]

ww520 9y ago

The 3 month dip a year ago was justified. NVDA's revenue cycle is such that the forth quarter holiday season rakes up huge amount of sales. The following 1st quarter is in a slump.