ooli3 comments on OP created a stock market game where you compete with a couch. Guess who wins.

[–] ooli3@sopuli.xyz 30 points 1 week ago* (last edited 1 week ago) (4 children)

if you want to try it , it is fun : https://beatthecouch.com/can-you-time-the-market

it is interesting that 1 out of 10 fund manager beat the market. And that is exactly what did the player of the game : 12% beat the market without it being pure luck.

So it seems there is an embedded 10% of beating the market. Which could only mean , that even those 10% are just lucky, or in other term, there is a non randomness in the market that 10% of people can actually randomly get right. Or something like that.

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[–] historicaldocuments@lemmy.world 11 points 1 week ago (3 children)

It would be interesting to see if it's kind of the same fund managers beating the market all the time, or it is random 10%? Unfortunately since everyone involved is competing for profit there's no incentive to let the rest of the world know what they've found.

The flip side of those numbers is that 90% of fund managers won't beat the market. If your fund manager is just buying stacks of VOO then why are you paying them to do what you can do yourself. If they're buying a bunch of complicated stuff to match VOO but charge you more money for it, then you're behind people who just bought VOO for a much smaller fee. If they're not beating VOO then how do they stay in business (hint: marketing)?

One interesting aspect of this game is that it's enough to trigger Fear Of Missing Out (FOMO). It does not, however, capture how many days it would take for whatever your guess is to play out. You can be utterly convinced a crash is coming and try to sit it out and just watch the line go up. To really play you'd need to see other indicators like volume and what the VIX is doing, but none of that measures the underlying health of the market itself-just what other people think it's doing.

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[–] ooli3@sopuli.xyz 2 points 1 week ago (2 children)

The Renaissance quantitative fund (only based on stat) seems to beat the market consistently : https://en.wikipedia.org/wiki/Renaissance_Technologies

So was Warren buffet (mostly based on owning company and ruling them)

But that's about the only who consistently are beating the market.. but they do... so, it's possible

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[–] historicaldocuments@lemmy.world 4 points 1 week ago (1 child)

Buffet can sling around more money than most and tends to buy huge chunks of single companies rather than move a lot of chess pieces at once. I thought the article on Renaissance was interesting with regards to how periods of high volatility jammed up their computers/models. I wonder if all these NVIDIA chips that work well for LLMs would work well for investment style calculations.

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[–] ooli3@sopuli.xyz 3 points 1 week ago* (last edited 1 week ago)

no llm are bad at predicting market : https://www.zerve.ai/blog/llms-in-quantitative-research And I'm pretty sure it is not a human problem, a lot of fund, and intelligent people inside those, must have tried to make very advanced llm predict stock market for them. And if some succeeded (even remotely) the llm makers would have loved to publicize those.

Quantitative model, usually use average and long term strategy, using data in the marked to anticipate how the marked would move next. High volatility move.. are just things outside of the market moving it weirdly. Models can not predict nor anticipate those. It would be like predicting a terrorist attack, or something unusual.

Aside: High intensity trading is not a strategy, it is just a computer market maker : using known bid and ask and matching them fast, and catching a few fraction of cents every time, but doing it all the time. No prediction in that.

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