Can You Really Be Wrong "ALL THE TIME?"
There's a common pattern in investing and trading - across pretty much all disciplines - where if you're right, the best that anyone can do is be right 55-60% of the times.
But if you're wrong, you can be wrong most of the times if not all.
There are enough stories of people who are able to stick around because "they're wrong all the time" but I've never really questioned if they are indeed wrong "all the time" - ie. there's a story of Carson Block, founder of Muddy Waters Research, where he mentioned in one interview that his dad was that kind of guy "who's wrong all the time and that's the only reason he had a job".
I find this fascinating but have started to question its legitimacy. Like could it just be a sampling and confirmation bias making us believe that those who are wrong about markets a lot can be wrong "all the time" or "most of the time"? And is the true percentage of them being wrong is also 55%-60% of the times?
Love to hear some thoughts. If you've been around "people who are wrong all the time" perhaps you can confirm as well. I just haven't been around people like that.
Just as an example from looking at my PA's trade history, I'm wrong (just in terms of # of trades) ~90% of the time because I'll play around with lots of things purely out of curiosity that I don't have any real edge on in terms of understanding. The difference-maker comes down to only betting the farm on that 10% I have deep understanding of which (hopefully) makes up for all the fuck ups. That's probably what saves a lot of these folks who are wrong "all the time" because when they do happen to be right it's like hitting the jackpot on slots. Call it "strategy" if you want or summarize it as a crippling gambling addiction, but it's certainly not what 99% of people should be doing lol
If you’re wrong 90% of the times. Why can’t you just reverse your decision all the time?
Wait that’s actually stupid because in private markets you really can’t take a short position that easily.
Honestly I know what you mean - same goes for venture investing but really I just try to be more thoughtful and won’t invest in anything at idea stage. Need the whole experience.
Because as soon as I hit that buy button god texts "and fuck you too" to whatever I found interesting in the spur of the moment haha
What I consider my "PA" is exclusively public stocks/options/credit or crypto, I didn't co-invest when I was in PE (and won't touch VC) because I hate capital lockups praying for DPI and am not rich enough to make meaningful allocations. I don't count equity grants or operating businesses/real estate, I think of that as retirement insurance to set and forget.
Can’t see comments for some reason
Don't worry, Zohran Mamdani is wrong 100% of the time, yet is on track to becoming Mayor of the most important city in the world.
Believe in yourself, people!
Someone threw doo doo at this comment, mean there is someone on Wall Street Oasis who's triggered by anti-communist sentiment. What a time to be alive.
Not knowing the difference between democratic socialists, socialists, and communists doesn’t make you some sort of real American, it just makes you come across as uneducated. It’s also yet another occasion of bringing up politics where they don’t need to be.
There’s plenty to criticize about Mamdani without saying he is “wrong 100% of the time” (he isn’t) or that he is a communist (he also isn’t.) That is most likely why people are throwing shit: the idiocy of online discourse around topics these days.
Hit rate is one half the equation, other is slugging %...what matters more if what you can psychologically withstand.
Yeah ofc. But if you’re systematic enough I assume you can just automatically filter out opportunities with low impact.
Everyone has their spot.
I just haven’t come across people who are actually wrong most of the times so I’m wondering if it’s actually closer to wrong 60% of the times if they are consistently wrong
I know but that’s not the topic.
Question is do ppl who are “wrong all the time” actually wrong significantly above 60%
Lots of industries have winners who are only right ~55% of the time. Roger Federer said in his whole career he only won around 55% of his points. Successful blackjack players win ~54% of the time. If you can consistently win 55% in almost everything, you're successful.
Interesting but can someone be wrong all the time? because all that people have to do is just reverse the wrong decisions that someone makes. Decisions in markets are bidirectional
Geesh only 1 person has answered the actual question…
Obviously there’s the Inverse Cramer index (or there was) but we don’t know if it’s because the person who made the index was an idiot and didn’t think carefully about how allocations was handled or that Jim Cramer isn’t actually always wrong.
I'd think that you are more likely late than wrong. If you're buying after all good information is priced in, you're not going to beat the market. If you buy thinking you have an informational edge but market isn't convinced the stock should go up, you are wrong. You just need to be right on sol many things (price, timing, fundamentals, management) vs wrong only on one, so it does track.
Et et fugiat aut ut quis non. Et tempore laboriosam ad.
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