There are only 4 ways to make money: 1. You are selling a service -...
sysls@systematicls
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Apr 28, 2025
~1 min read
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There are only 4 ways to make money:
1. You are selling a service - e.g. providing liquidity/options for willing buyers.
2. You are earning a risk premium for doing something risky with your cash, e.g. you are willing to buy growth stocks before they have become empirically successful and hold them through the ups and downs.
3. You have an information edge that comes from either having access to data that the dollar-weighted average participant do not, or are able to transform and extract excess signal from contested data.
4. You have a structural edge that the dollar-weighted average participant do not - e.g. VIP fees, QFII feeds, etc.
If something does not seem like it fits into one of these 4 buckets, it likely does not make money.
1. You are selling a service - e.g. providing liquidity/options for willing buyers.
2. You are earning a risk premium for doing something risky with your cash, e.g. you are willing to buy growth stocks before they have become empirically successful and hold them through the ups and downs.
3. You have an information edge that comes from either having access to data that the dollar-weighted average participant do not, or are able to transform and extract excess signal from contested data.
4. You have a structural edge that the dollar-weighted average participant do not - e.g. VIP fees, QFII feeds, etc.
If something does not seem like it fits into one of these 4 buckets, it likely does not make money.
BURKOV@burkov
If algorithmic stock prediction doesn't work, how do these patterns work? Are you saying it's all a lie?!
