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Arbitrage of relevant information can be a powerful advantage of amateur retail traders, living as they do outside the Wall Street bubble. Participation in the

Arbitrage of relevant information can be a powerful advantage of amateur retail traders, living as they do outside the Wall Street bubble. Participation in the academic world, frequent international travel, and use of several foreign languages all helped me to make decisions that professionals might have overlooked. Ironically my best investing decision ever came about due to a drinking session in a KTV in Beijing. My assigned Chinese "companion" was flaunting her new iPhone 4, so, curious, I asked her in my rather limited Chinese: "Are these iPhones popular here". She responded, eyes glowing, "是！我们都有！” ["Yep, we all have them"]. Readers can guess the rest of the story.

quickthrower2 3y ago
It is still survivorship bias though. Phones selling like crack in Beijing means buy APPL and hold for how long? You predicted a new phenomenon but you didn’t know E(X) for that investment for the market in general without a lot of other data.
- tatrajim 3y ago
  At that point, while living in various countries in East Asia, I had been following the uneven fate of Apple for a decade. Japan and Taiwan had readily embraced Apple technology across the board, while South Korea remained a resolutely Windows world, that used non-tariff barriers (the dreaded, required WIPI chip) until 2009 to keep out the iPhone. In China, despite Foxconn assembling Apple products there, the first Apple Store only opened in 2008 and its products rarely seen anywhere before 2009. The commonplace assumption across the financial press was that China was too poor, and its consumers too practical, to pay a needless premium for iPhones. When I heard in early 2011 from the KTV hostess that iPhone 4 sets were universally popular among her colleagues I realized that iPhone mania in China among trend-setting urban women was underway and that the narrative was badly in error. And I believed what was subsequently borne out that this trend would rapidly spread all across China over the next decade. Of course, much other subsequent real-time "research" went into my investments, during life and travels across Asia, and I developed a variety of ways to hedge my positions. But what set me apart as an outside amateur was that I had deep, real-life knowledge of important foreign markets that the Wall Street financial press and institutions either ignored or got wrong,
  - deleted 3y ago
    [deleted]

quickthrower2 3y ago

It is still survivorship bias though. Phones selling like crack in Beijing means buy APPL and hold for how long? You predicted a new phenomenon but you didn’t know E(X) for that investment for the market in general without a lot of other data.

tatrajim 3y ago
At that point, while living in various countries in East Asia, I had been following the uneven fate of Apple for a decade. Japan and Taiwan had readily embraced Apple technology across the board, while South Korea remained a resolutely Windows world, that used non-tariff barriers (the dreaded, required WIPI chip) until 2009 to keep out the iPhone. In China, despite Foxconn assembling Apple products there, the first Apple Store only opened in 2008 and its products rarely seen anywhere before 2009. The commonplace assumption across the financial press was that China was too poor, and its consumers too practical, to pay a needless premium for iPhones. When I heard in early 2011 from the KTV hostess that iPhone 4 sets were universally popular among her colleagues I realized that iPhone mania in China among trend-setting urban women was underway and that the narrative was badly in error. And I believed what was subsequently borne out that this trend would rapidly spread all across China over the next decade. Of course, much other subsequent real-time "research" went into my investments, during life and travels across Asia, and I developed a variety of ways to hedge my positions. But what set me apart as an outside amateur was that I had deep, real-life knowledge of important foreign markets that the Wall Street financial press and institutions either ignored or got wrong,
- deleted 3y ago
  [deleted]