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Theres actually still money to be made in small scale strategies. Sophisticated funds are running billions. They cant focus on strategies that only work for 100

Theres actually still money to be made in small scale strategies. Sophisticated funds are running billions. They cant focus on strategies that only work for 100-500k. This is where big returns can be made. Even warren buffet will say, if he was only managing 1 million, he would get 100% a year returns.

xapata 6y ago
That doesn't make sense unless there are very few viable small scale strategies, at which point they'd probably be difficult to identify. Your assertion might have been true before computers were able to help someone manage many strategies simultaneously.
- logicslave 6y ago
  No it makes a ton of sense. 100k is too small to have a researcher focus on full time. His compensation is probably 500k or more. Then add in fees, infra, cost of regulations, etc and small time strategies arent developed. Making money in the market is completely overrated from a difficulty perspective, the hard part is managing billions.
  - xapata 6y ago
    You're saying it'd require a salary of $500k or more to find someone competent enough to manage an investment opportunity worth $100k annually? That implies the investment opportunities are actually quite complicated. Obviously, opportunities exist for investment gains at all magnitudes. The question was whether they're easy enough for the average Jolanda. If Jolanda would require $500k annual salary to do the work, then, that easy opportunity doesn't really exist at all. Alternately, if Jolanda doesn't need to make this opportunity her full-time job, then the investment company can pay her $500k to manage many of these small opportunities. After all, there must be many opportunities. Otherwise only 1 of the HN readers would be able to exploit it. In which case, again, it doesn't really exist at all.
    - logicslave 6y ago
      Honestly, you seem like youre trying to reason this out with zero experience in the field. You cant just "run statistics to identify strategies". I'm not going to go into it further because you know nothing
      - xapata 6y ago
        I'm not sure how you came to either of those assumptions. First, I'm an economist. Second, I didn't suggest any method for identifying strategies. The question is the number of potential strategies. If it's relatively easy to make money investing on a small scale, that means there are many potential strategies that don't require someone's full attention. If there are many potential strategies that don't require full attention, then someone skilled can go after many of those potential strategies and transform the small-scale into a large-scale opportunity. Since we've already established that these large-scale opportunities are hard ...
        logicslave 6y ago
        15% return on 5 billion is much higher than 100% return on 1 million. Its economics. Secondly, economics has nothing to do with investing, and is worthless. The sum of managing 1000 small strategies is way more work than the number you would manage with billions. And yes, there is easy money laying around if you know what youre doing. There are dollar bills laying on the ground for smaller scale strats.
        xapata 6y ago
        I don't see why those particular magnitude calculations are relevant to this analysis. > economics has nothing to do with investing, and is worthless Is it worthless because it has nothing to do with investing, or has nothing to do with investing because it's worthless? Further, why do you think the Federal Reserve hires so many economists if economics is worthless? > And yes, there is easy money laying around if you know what youre doing. There are dollar bills laying on the ground for smaller scale strats. People just arent taking about them Isn't that like saying, "Winning chess tournaments is easy if you know what you're doing."? If something requires expertise, then it isn't easy. If finding these smaller scale strategies requires expertise, then the expert probably has better things to do with their time. I suppose that holds to arguing with idiots on Hacker News.

xapata 6y ago

That doesn't make sense unless there are very few viable small scale strategies, at which point they'd probably be difficult to identify. Your assertion might have been true before computers were able to help someone manage many strategies simultaneously.

logicslave 6y ago
No it makes a ton of sense. 100k is too small to have a researcher focus on full time. His compensation is probably 500k or more. Then add in fees, infra, cost of regulations, etc and small time strategies arent developed. Making money in the market is completely overrated from a difficulty perspective, the hard part is managing billions.
- xapata 6y ago
  You're saying it'd require a salary of $500k or more to find someone competent enough to manage an investment opportunity worth $100k annually? That implies the investment opportunities are actually quite complicated. Obviously, opportunities exist for investment gains at all magnitudes. The question was whether they're easy enough for the average Jolanda. If Jolanda would require $500k annual salary to do the work, then, that easy opportunity doesn't really exist at all. Alternately, if Jolanda doesn't need to make this opportunity her full-time job, then the investment company can pay her $500k to manage many of these small opportunities. After all, there must be many opportunities. Otherwise only 1 of the HN readers would be able to exploit it. In which case, again, it doesn't really exist at all.
  - logicslave 6y ago
    Honestly, you seem like youre trying to reason this out with zero experience in the field. You cant just "run statistics to identify strategies". I'm not going to go into it further because you know nothing
    - xapata 6y ago
      I'm not sure how you came to either of those assumptions. First, I'm an economist. Second, I didn't suggest any method for identifying strategies. The question is the number of potential strategies. If it's relatively easy to make money investing on a small scale, that means there are many potential strategies that don't require someone's full attention. If there are many potential strategies that don't require full attention, then someone skilled can go after many of those potential strategies and transform the small-scale into a large-scale opportunity. Since we've already established that these large-scale opportunities are hard ...
      - logicslave 6y ago
        15% return on 5 billion is much higher than 100% return on 1 million. Its economics. Secondly, economics has nothing to do with investing, and is worthless. The sum of managing 1000 small strategies is way more work than the number you would manage with billions. And yes, there is easy money laying around if you know what youre doing. There are dollar bills laying on the ground for smaller scale strats.
        xapata 6y ago
        I don't see why those particular magnitude calculations are relevant to this analysis. > economics has nothing to do with investing, and is worthless Is it worthless because it has nothing to do with investing, or has nothing to do with investing because it's worthless? Further, why do you think the Federal Reserve hires so many economists if economics is worthless? > And yes, there is easy money laying around if you know what youre doing. There are dollar bills laying on the ground for smaller scale strats. People just arent taking about them Isn't that like saying, "Winning chess tournaments is easy if you know what you're doing."? If something requires expertise, then it isn't easy. If finding these smaller scale strategies requires expertise, then the expert probably has better things to do with their time. I suppose that holds to arguing with idiots on Hacker News.