arbitragedude

8 ปีที่แล้วdiscuss

What do you guys think? Is this the best robot on the planet?

12 ปีที่แล้วdiscuss

In product terms, I think so but I really think this has to do with the founders. How long are you willing to hold onto your vision? The got an offer and sold-out. To some extent its a function of expected payoff for the founders vision and reaching their capital utility function.

arbitragedude

12 ปีที่แล้วdiscuss

Hi Panarky! First, Please let me explain how the accuracy rating works on the www.arbitragedude.com. 1) It's not a simple buy and sell and see what your return is. if return is positive you outperform. that is not how it works on my site for accuracy rating.

It's based on "Information Ratio Comparison with a long S&P Information Ratio". Information ratio is return/returnVol of your trade. This return/risk is compared to simulatenous S&PReturn/vol (a long position in S&P here ALWAYS). So you would have to outperform S&P portfolio buy on a vol adjusted basis. Which is a huge endeavor, because S&P has a much lower vol than indivdiual stocks due to diversification. I am trying to determine if you have "skill" picking stocks and outperforming S&P on a risk adjusted basis. In simple terms, even if you put buy and sell opposing views doesn't mean you outperformed S&P on a vol adjusted basis, so your accuracy rating would still go down. Which is veyr likely if your sell stock doesn't go down in price at all but just underperforms S&P returns. As stocks on average have a positive drift (i.e. 6-8% return over long periods) I hope this is clear. You would have to have inside information that a particular stock was going to move more than the market times the stock's beta with respect to the market. Please ask if this is not clear. So the coin flipping strategy doesn't apply directly. Please throw at me your next sophistication when you're ready (Hint: figure out probablity that a stock outperforms S&P on a risk-adjusted basis in a given period). We are always comparing it with S&P because we want to see if investors should hold the market portfolio or rely on a stock picker.

2) This issue is not UNIQUE to my site. There are millions of boards (yahoofinance, cnbc, barrons, stocktwits, bogleheads, ft, you name it) which provide no accuracy ratings for any of their commenters, bloggers and ppl can do what you are suggesting their as well. And in fact, this problem exists across the internet. Jim Cramer the biggest media analyst has an awful trackrecord but any new entrant doesn't know that. .So your concern applies to all the financial media forums in general! for the record unlike WSJ, cnbc, ft and other litter out there, my website at least attempts to track risk adjusted accuracy for everyone as per above metric not coin flippa.

3) Also most sophisticated INVESTORS ARE NOT DENSE. They will check your outperformance versus your reasons for outperformance in your writeups. People on the street generally know who got lucky and who called "it" and know her/his stuff.

4) VALIDATION TECHNIQUE DUH!!! Also I am currently testing beta traction I plan to add social media authentication (or cellphone code check) and minium trades before accuracy/crowd validation of articles. Eventually connect with brokerage to verify purchase.. which is not a problem. Also i plan to turn this into a crowdsourced efforts where analysts/writers get paid for their efforts.

The last part is where it gets interesting. I am trying to put a check across rampant misinformation on Wall st which hurts retail investors the most. That being said, I am open to suggestions to change things on my site and build it better.

Thanks

arbitragedude

12 ปีที่แล้วdiscuss

Think about what you're saying dude.

If you had a barn of 10 different animal species all fenced in. Cows, dogs... and Kangaroos. And if 10% of animals jumped the barn fence and they all happened to be Kangaroos. Your conclusion is that that's a random event. My conclusion is that Kangaroo is skilled at jumping. You lack common sense!!!

arbitragedude

12 ปีที่แล้วdiscuss

you can open a producthunt or hackernews focused on indian startups..

arbitragedude

12 ปีที่แล้วdiscuss

So your take "Yes of course, value investor is a chance event".

Alternative hypothesis does exist:-) They also have names like Berkshire, Soros, DE Shaw, Renaissance, Virtu, Tiger cubs, Ed Thorpe, Bridgewater, AQR, Tepper .. why do they exist?? markets are efficient. Are they not as "deep" thinkers as you are? Is that why they have wasted their 30-40yrs amassing wealth in the market? They must not be very smart wasting all that time thinking markets are inefficient.

Indeed, very large hedge funds and super successful/secretive investors do exist (they are the same y/y after). The successful one get larger every year. If markets are efficient, why would hedge funds particularly the successful ones? Some of them aren't reported in the media as they are private family offices. So the alternative hypothesis Why would these guys be wasting their time? And more recently high frequency trading hedgefunds show Sharpe Ratios of more than 7, outperforming the market by more than 15x.

The reason why they can't become large as the market is because they can't get enough leverage and/or find large enough balance sheet. But you can bet, they are actively seeking more money to expand. Case in point, Bridgewater, which exploits really a longshot bias, via their risk-parity fund is now a $160bn fund (grew from less than $1mn in 1970s). This is in practice, you just can't get the world's balance sheet as Capital is tied up in other economic processes. Also large swings in the stock market also indicate that the markets are not efficient. What justifies 50% drop in S&P in less than a year, if everything was fairly priced. In my opinion, super successful investors also reach their utility function for capital. Case in point is guys like Ed Thorpe, who ran successful hedgefunds for 20yrs with same 20% return every year. There's a finite capital utility for every man.

I agree that someone who is not skilled in the market day to day, should just invest in S&P.

arbitragedude

12 ปีที่แล้วdiscuss

So if 10% of the people outperform the market and they all happen to be value investors", is that a random event?

arbitragedude

12 ปีที่แล้วdiscuss

Well you dropped buffets name first. I only shared Shiller's article because I was too lazy to type out the conditional probability. Off the 10% of the people, who beat market handily? If they all happen to be deep value investors.

Will you still conclude blackswan? Or would you start thinking Conditional probability

arbitragedude

12 ปีที่แล้วdiscuss

   The entire $10trn financial industry exists on the premise that markets are not efficient.  Even Warren Buffet has said himself,

"I think you will find that a disproportionate number of successful coin-flippers in the investment world came from a very small intellectual village that could be called Graham-and-Doddsvill" All the successful investors seem to come from the same investment zoo!!

Number of consistently successful traders and hedgefund managers do exist. I agree 90% can't beat the market but I am trying to find the 10% that do beat the market consistently through ArbitrageDude. Do you find it bizzare the buffet tends to make the right trade everytime?? Do you find it bizzare Jim Simmons returns are 30% annualized consistently

Also, Please read Robert Shiller's (Nobel Prize) winner's response to efficient markets. He tells it better than I do.

http://blog.supplysideliberal.com/post/82659078132/robert-sh...

i understand what your'e saying about probability and independent trials.

Also my financial media lacks accountability. My website tracks everyone's trading record so you can see for yourself if Jim Cramer's recommendations are worth listening to.

FT, WSJ, barrons, none of these tabloids provide any accountiblity record of their recommendations.

arbitragedude

12 ปีที่แล้วdiscuss

Actually, I have worked in the bond market in Wall St. for more than a decade and a have a masters degree in computational finance from a top university. My accuracy measure is based on information ratio. As in whether the poster outperforms S&P 500 on a risk adjusted basis. Poster's information ratio is compared simultaneously with a position invested in S&P 500. If the poster outperforms, his accuracy goes up.

What do you think?

arbitragedude

12 ปีที่แล้วdiscuss

gals/guys what do you think about my attempt to outsmart Wall st?

arbitragedude

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