What's the most predictive multifactor model for stocks a money manager can subscribe to?
- Thread starter ms33
- Start date
There is no holy grail !
I've lost count how many times people come on EliteTrader thinking some book, some course, some software will magically make them billionaires.
If a money manager is dependent on subscription services for stock selection, then I would very much encourage his/her clients to run for the hills and choose a different money manager.
A good money manager implies professionalism, and with that professionalism comes the background of experience, which includes knowing how to make their own selections !
I've lost count how many times people come on EliteTrader thinking some book, some course, some software will magically make them billionaires.
If a money manager is dependent on subscription services for stock selection, then I would very much encourage his/her clients to run for the hills and choose a different money manager.
A good money manager implies professionalism, and with that professionalism comes the background of experience, which includes knowing how to make their own selections !
If what you say is true, StarMine woud have gone out of business instead of being acquired by Reuters. BARRA wouldn't exist. The Prediction Company kaput. Gradient never happened. And another 50 or 100 model providers would have disappeared instead of increasing their ranks every year. Clearly a niche but a lucrative one.
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What I say is very much true. Most money managers I know don't use StarMine or any of that nonsense.
The sort of services you describe have their uses in certain parts of the industry, but not the uses you imagine. A StarMine subscription is not going to make you a millionaire.
There is no substitute for hard work and experience in the industry. There are no shortcuts.
The sort of services you describe have their uses in certain parts of the industry, but not the uses you imagine. A StarMine subscription is not going to make you a millionaire.
There is no substitute for hard work and experience in the industry. There are no shortcuts.
@ms33 The fact that those companies exist and have been acquired doesn't mean that they provide you with useful stock pickings. I work on the institutional side and you'd be amazed the amount of useless stuff we buy/subscribe to just so that we can show to our clients we use 'top-notch' software and then never use it.
Same for bloomberg / reuter terminals
@Tim Smith is right in a way. Most of that stuff is crap and we either don't use it or just pay for it without using it. Note that some mediocre money managers might completely rely on it. But then 95% of the industry don't beat the S&P 500 which is a pretty bad rate when you know you can beat the S&P 500 by taking random stocks every year (interesting paper published by Winton on that this year).
However, there are plenty of very good public papers on trend following on stocks that can make you a L/S stock portfolio and easily beat the S&P 500.
Same for bloomberg / reuter terminals
@Tim Smith is right in a way. Most of that stuff is crap and we either don't use it or just pay for it without using it. Note that some mediocre money managers might completely rely on it. But then 95% of the industry don't beat the S&P 500 which is a pretty bad rate when you know you can beat the S&P 500 by taking random stocks every year (interesting paper published by Winton on that this year).
However, there are plenty of very good public papers on trend following on stocks that can make you a L/S stock portfolio and easily beat the S&P 500.
In an age where a staggering amount of people considered Donald Trump a viable president of the USA ... yeah, sure, anything's possible... ask away....
Of course there is, the more capital you have the better chance you have of buying higher quality knowledge, tools and services. The holy grail is money makes money.
Capital to invest in services, tools, knowledge:
$100s - decades to learn
$1,000s - years to learn
$10,000s - months to learn
$100,000s - weeks to learn
$millions - days to learn
So the real question, is there a high probability solution for people with no capital, yes, their time. Is there a high probability solution for people with no capital and no time, only if you find someone stupid enough to let their knowledge or solution go for free.
It's really very simple, but that's not what anyone wants to hear nor believe, so they pretend it doesn't exit in the great delusion of wanting to make money with no effort. I have access to all five levels of tools and knowledge, at each level you need to prove to them why you should have access, most of the time they will tell you to get lost.
If someone is smart enough to bring in $10million of funds, take 4% per year in management fees, pay $200,000 for high quality services which keeps the clients happy, and pockets $200,000 in revenue power to them. There is no best, Sharpe, Beta, Alpha, it needs to be diversified to each clients goals, some want risk, some want return. That's why you have placement agents.
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That's one of those areas where Americans and the rest of the world differ.
The Americans think you can throw money at problems and get a better solution faster.
The rest of the world lives in the real world. The same world in which the irrational markets in which we invest and trade live.
A fool and his money are easily parted.
To repeat myself, there is no holy grail. No subscription service or advisor will deliver you results 100% of the time, no matter how much money you have to throw at such things.
Anyone claiming they've "got the grail if you've got enough money" is to be taken with a very large pinch of salt indeed.
It does seem people who suddenly get hands of alot of money, when not grown organically don't know how to safely invest. Biggest mistake is then to trust a financial crook^H^H^H^Hadvisor and sink the money in some hell-hole. Sad to see when largest lump is wasted on some "guaranteed product", but good life-lesson.