doing useful things that suck
common argument...
points at prop trading firm with ultra-low latency infrastructure and sophisticated modeling techniques
"you, an individual, could never compete with that"
of course.
you shouldn't even try.
so why can many of us small speculators do ok?
by playing totally different games
generally, you got two things in your favour:
- ability to pick spots
- ability to go after small opportunities.
The basic idea is:
- do useful things
- in uncompetitive places
What is useful?
- Taking on risk others dont want
- Trading with price-insensitive people (people who are forced or have weird objectives)
- Pushing dislocations back towards equilibrium
but lots of people are trying to do that.
doing useful things is a competitive business.
so, you need to find places to do it that kinda suck.
- maybe the opportunities don't come along that often
- maybe the size of the mispricings is small
- maybe it involves risks or operational effort that doesn't scale well or is unacceptable to
bigger firms.
do useful things that kinda suck, basically.
yeah, I know, real glamorous right?
beep...boop