[1]: https://en.wikipedia.org/wiki/Efficient-market_hypothesis
There are no alternatives to Nvidia GPUs if you want to efficiently train an AI, they have an effective monopoly.
Personally i would have invested in TSMC/ASML or Intel as this point. Buy the shovel maker.
>>TSMC
Relatively low margins, few good well negotiating customers. Can't grow fast.
>>ASML
What do you think market could have missed there? Good company with simple business model. Very unlikely to grow fast.
>>Intel
Terrible company with long track record of stupid decisions and deception. What make you think they will suddenly turn around and start innovating?
That's why my bets are on them.
Everyone is reliant on ASML and unlikely to change.
Intel has fabs and is too big to fail, the us government won't let it happen.
I'm making a safe bet on the long term, not a speculative one based on a technology that will or won't be worth that valuation.
After all, if it's election day, my analysis says FooCorp is worth $50 under a Biden administration and $100 under a Trump administration, and the candidates are neck-and-neck, that means the shares are worth $75. But tomorrow the shares will have either gained or lost $25.
But as detailed recently in Going Infinite, Jane Street's losses around the 2016 election were because they didn't know outcome was worth the example $50 and which was $100.
Figuring out which ones, and to what extent, is an unorthodox but effective path to wealth.
A finance professor is walking across the University of Chicago campus with a student. They come upon $20 lying on the ground, and the student leans down to pick it up. The professor said, “Don’t bother. If it was really there, somebody else would’ve already picked it up.”
One way to think of trading is you're kind of in a ponzi scheme. Not an illegal one, but you're buying stock today you're hoping somebody else will buy off you at a higher price one day in the future. If you short a position, you're hoping that somebody will sell you stock at a lower price than it is today for some reason.
All of this suggests to me that markets are not the perfectly rational machines people insist they are. Sure, most people would do better to buy and hold indexes than to time trades on individual stocks (by a long margin), but the argument that all value is priced in all of the time is just daft.
This is not an implication of the efficient-market hypothesis. The efficient-market hypothesis implies no investment strategy can have expected returns greater than the total market, but says nothing about what the returns of the total market actually are.
Your argument seems to be "yeah, assume there is no value or edge, and let's just hope for variance in our favour" is what the majority of professional traders, funds, quants, and so on are all doing. If that isn't what you meant, I'd be interested in how you clarify it: what do you think they're doing, and why?
1) Someone with more resources than you has different aims and incentives than you; the prices of those shares likely reflect their valuation, not a "true" value.
2) Because of 1, the the future returns that are reflected in the price of the stock are not necessarily for the company alone, but also of future returns of other companies and ventures that are connected to the stock in question through this hypothetical someone.
3) Volatility is good if you're poor. I want my money with a winner before everyone else knows it's a winner. Index funds are slush for smart money's liquidity scams.
https://arxiv.org/abs/1002.2284
What's your bet on the latter? I'm... skeptical.
> We ask our question, call it question 1: “Does there exist a strategy that statistically significantly (after accounting for possible data mining) makes money (after accounting for transactions costs)?” An answer to that question essentially tests each of the possible 3n strategies.
which is non-sequitur. It's like asserting the only way to find the shortest path between two vertices in a graph is to exhaustively check every path, because waves hand.
Also note that paper doesn't appear to have undergone any form of peer review.