I don't think that one of Kens graduates is going to apply for any of those jobs. At the best someone can tell the small retail trader how the big boys think so they can front run them.
You won't be able to front run them because another hedge fund with a team of PhDs is already doing that.
The advantage you have as a retail trader is:
1) It is your capital, you set your risk and volatility limits.
2) You are not constrained by capacity (unless your size is 10k+ shares etc) -- THIS IS A BIG ONE. Hedge funds (most) limit their trading as a % of average daily volume; this means that many stocks, especially in the Russell 2k, pay an illiquidity premia (excess returns).
3) You are closer to the "real economy" -- professional traders need to pay experts to learn about what's going on in the economy, industry, or company. You may work in an industry and have friends that work in others -- without this being material non-public information -- you can survey their sentiment as a "channel check."
4) You can move fast and be nimble. If your thesis changes you can liquidate your position in minutes. When you increase your confidence, you can also add more aggressively.
However, none of that will help you if you do not have a basic framework of markets and asset pricing. Things like microstructure and asset pricing are necessary because that tells you the available ways to make money. From there, you can analyze and harvest anomalies to beat a benchmark (say a goal of making 10%/yr.).
In regards to hobbyists -- I get that. However, I think a hobbyist would find more value if they learned the basic things that a Michelin starred chef does versus what a line cook at taco bell does. It helps them understand and appreciate the work of the real chef, while also elevating their personal experience (now they know how to properly de-bone fish, or cut a chicken, or pan fry a steak, etc.).
- An example, from an investment standpoint, is positioning your portfolio to benefit from industries likely to experience positive revenue/eps surprises through the business cycle.
- Another example would be knowing to exit a stock when the thesis changes (immediately dump -- especially if led by a catalyst like an earnings miss & lower).
- When buying or selling a stock, retail can benefit by benchmarking against VWAP/TWAP through their trading period.
- For the day trading crowd, they'll know to seek volatility and understand that they are trying to capture shocks to liquidity, typically driven by a catalyst (which they can price against).
- They can also learn more about momentum (autocorrelation) and manage short-term reversal (or trade it) successfully.
None of these things are guaranteed to make someone money or become rich, but they are sources of excess returns or can help increase efficiency in a return.
