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You're misinterpreting what random paper says. Random paper (Fama et al.) doesn't say it's impossible to predict how well a company performs. It says why do y

by YZF 5y ago

You're misinterpreting what random paper says. Random paper (Fama et al.) doesn't say it's impossible to predict how well a company performs. It says why do you think you can predict better than the 1000 Ph.D. employed by trading co. inc. when all of you have access to the same public information? So the price of the company's stock is going to converge to some number that already reflects the known information. Not sure where you're getting the stock returns are random bit either.

sokoloff 5y ago
The “random” bit seems to be coming from Retric’s comment to which they are replying.
bredren 5y ago
Despite the downvotes, I am in generally in support of GP. If you read hn a lot and built a lot over the past decade it hasn’t been hard to predict better than “a 1000 phds” which companies would win. NVIDIA, apple, even small plays like twilio. It was obvious these companies had big leads in stuff that made money. Go back and read the Cloudflare IPO filing thread here. That opened at what, $16? You read the R2 thread from a few days ago it is again obvious AWS will bleed some of the most influential engineers when this becomes generally available. I don’t have a PhD mind you, but I would presume this will lead to entire companies moving to CF for some primitives, eventually CF pick up entire accounts. Do PhDs at trading companies get annoyed because some AWS services still will only respond with plain/text in api responses containing json? That they have to write a custom parser as a result? Or that the UI for AWS SNS in setting up an HTTPS subscriber kinda sucks? Like it was mostly done but worked so people got pulled elsewhere? Do wall street PhDs realize the bundling of expensive AWS cloud primitives to use other AWS cloud products is anti-customer, and that maybe this is going to translate to devs voting with their feet when CF makes this move? Heck, even the R2 announcement makes the egress fees issue clear in plain English. There are tons of comments validating that pain. Business people shouldn’t need a lot of convincing. Do the above observations and experiences working with AWS and reading others experiences add up to more knowledge than 1000 PhDs? I wouldn’t have thought so, but the value of an academic degree has been on a downward spiral for some time.
- ffggvv 5y ago
  so i assume you’re a billionaire fund manager?
- nextaccountic 5y ago
  > You read the R2 thread from a few days ago it is again obvious AWS will bleed some of the most influential engineers when this becomes generally available. Is it obvious? How likely is it that you're right - is the chance 100%? Is it even possible that you're wrong and this don't happen?
- vlovich123 5y ago
  A company doing well isn’t indicative of the stock price doing the same. For example Cloudflare has one of the highest P/Es on the market, meaning its future growth has been accounted for by investors. So executing extremely well doesn’t cut it. You have to find new areas of growth that investors haven’t anticipated or grow your existing lines more quickly than investors anticipate.
- porb121 5y ago
  hey, go trade, then! you can just long these equities yourself and make a lot of money if you're right. and there's a lot of very smart and very sophisticated firms that would love to be your counterparty, so you'll get great execution!
- HyprMusic 5y ago
  Everything is obvious in the stock market with survivorship bias but in reality there's just as many "sure fire wins" that don't succeed as there are ones that do. Besides, successful trading is more about getting the timing right than it is about picking which companies will eventually increase in value.
bryanrasmussen 5y ago
>It says why do you think you can predict better than the 1000 Ph.D. employed by trading co. inc. when all of you have access to the same public information? well one reason would be that there is something about the market at time X that means conventional wisdom is faulty, since the 1000 Ph.D. employed by trading co. inc will be following the conventional wisdom there is a chance to outwit - years leading up to 2007 housing crash spring to mind as an example where this can happen.
- Retric 5y ago
  Housing looked obvious, but when exactly would it pop. As the saying goes “The market can stay irrational a lot longer than you can stay solvent!” Sure, if you’re correct it’s easy to say the logic was sound, but you never learn the odds just what happened.

by YZF 5y ago

sokoloff 5y ago

The “random” bit seems to be coming from Retric’s comment to which they are replying.

bredren 5y ago

Despite the downvotes, I am in generally in support of GP. If you read hn a lot and built a lot over the past decade it hasn’t been hard to predict better than “a 1000 phds” which companies would win. NVIDIA, apple, even small plays like twilio. It was obvious these companies had big leads in stuff that made money. Go back and read the Cloudflare IPO filing thread here. That opened at what, $16? You read the R2 thread from a few days ago it is again obvious AWS will bleed some of the most influential engineers when this becomes generally available. I don’t have a PhD mind you, but I would presume this will lead to entire companies moving to CF for some primitives, eventually CF pick up entire accounts. Do PhDs at trading companies get annoyed because some AWS services still will only respond with plain/text in api responses containing json? That they have to write a custom parser as a result? Or that the UI for AWS SNS in setting up an HTTPS subscriber kinda sucks? Like it was mostly done but worked so people got pulled elsewhere? Do wall street PhDs realize the bundling of expensive AWS cloud primitives to use other AWS cloud products is anti-customer, and that maybe this is going to translate to devs voting with their feet when CF makes this move? Heck, even the R2 announcement makes the egress fees issue clear in plain English. There are tons of comments validating that pain. Business people shouldn’t need a lot of convincing. Do the above observations and experiences working with AWS and reading others experiences add up to more knowledge than 1000 PhDs? I wouldn’t have thought so, but the value of an academic degree has been on a downward spiral for some time.

ffggvv 5y ago
so i assume you’re a billionaire fund manager?
nextaccountic 5y ago
> You read the R2 thread from a few days ago it is again obvious AWS will bleed some of the most influential engineers when this becomes generally available. Is it obvious? How likely is it that you're right - is the chance 100%? Is it even possible that you're wrong and this don't happen?
vlovich123 5y ago
A company doing well isn’t indicative of the stock price doing the same. For example Cloudflare has one of the highest P/Es on the market, meaning its future growth has been accounted for by investors. So executing extremely well doesn’t cut it. You have to find new areas of growth that investors haven’t anticipated or grow your existing lines more quickly than investors anticipate.
porb121 5y ago
hey, go trade, then! you can just long these equities yourself and make a lot of money if you're right. and there's a lot of very smart and very sophisticated firms that would love to be your counterparty, so you'll get great execution!
HyprMusic 5y ago
Everything is obvious in the stock market with survivorship bias but in reality there's just as many "sure fire wins" that don't succeed as there are ones that do. Besides, successful trading is more about getting the timing right than it is about picking which companies will eventually increase in value.

bryanrasmussen 5y ago

>It says why do you think you can predict better than the 1000 Ph.D. employed by trading co. inc. when all of you have access to the same public information? well one reason would be that there is something about the market at time X that means conventional wisdom is faulty, since the 1000 Ph.D. employed by trading co. inc will be following the conventional wisdom there is a chance to outwit - years leading up to 2007 housing crash spring to mind as an example where this can happen.

Retric 5y ago
Housing looked obvious, but when exactly would it pop. As the saying goes “The market can stay irrational a lot longer than you can stay solvent!” Sure, if you’re correct it’s easy to say the logic was sound, but you never learn the odds just what happened.