The new age day traders

I’ve been at multiple weddings this year and have caught up with a lot of old friends after 2+ years. It seems like everyone is now investing by picking stocks and cryptocurrencies.

I’ve written a lot about the new day and age of investing. It seems like everyone thinks they’re a successful day trader. While all the hype right now in the finance world is about venture capital, I believe hedge funds may make a come back with future generations trading the way they do.

This is both an awesome and scary thought. I believe everyone should have access, but quite often a lot of these traders are in over their heads. A lot of my old friends at these weddings have been playing with a lot of leverage lately and I’m terrified for them.

I loved this tweet story by Trung Phan about Jim Simons and his hedge fund, Renaissance Tech. You should read it for yourself, but it tells the story about a mathematician named Jim Simons who ended up running the most successful hedge fund of all time.

Perhaps the craziest part of the thread was the fact that despite being the most successful hedge fund of all time, they only won 50.75% of their trades.

Yes, these brilliant PhDs who are likely much smarter than you and I won only a tad bit more than half their trades.

Many should take a lesson from this before trying to day trade their way to millions. This is who you’re going up against.