[HN Gopher] Building the Inverse Jim Cramer Index
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Building the Inverse Jim Cramer Index
Author : vampiretooth1
Score : 41 points
Date : 2022-04-23 18:40 UTC (4 hours ago)
(HTM) web link (quantbase.medium.com)
(TXT) w3m dump (quantbase.medium.com)
| tjs8rj wrote:
| Very interesting and Quantbase looks neat (as well as the other
| investing strategies you link to: Pelosi Tracker, leveraged long
| run investing, etc).
|
| Is there a case for this as an actual investment or primarily
| novelty?
| [deleted]
| [deleted]
| myvoiceismypass wrote:
| I am running into website issues galore with quantbase today
| and it is turning me off.
|
| Like: window alert usage for "logging", pages rendering the
| following as text "Application error: a client-side exception
| has occurred (see the browser console for more information)."
|
| General session wonkiness.
|
| Lovely console errors: "Uncaught (in promise) SyntaxError:
| JSON.parse: unexpected character at line 2 column 1 of the JSON
| data"
|
| Seems neat, though, I don't see why or how I should trust them
| with bank account access.
| robonerd wrote:
| But what happens when Jim Cramer starts promoting the Inverse Jim
| Cramer Index?
| SomeBoolshit wrote:
| The moon explodes.
| marginalia_nu wrote:
| The Hofstadter crash of 2023.
| ProjectArcturis wrote:
| So, they tried a whole bunch of things, and even with the benefit
| of that lookforward bias, their final strategy still
| underperformed the S&P? Color me unimpressed.
|
| Edit: I looked at their site and it's clear that their business
| model is just to gather assets to charge fees on. Which is why
| they've developed strategies like Inverse Cramer, Pelosi Tracker,
| WallStreetBets -- these strategies don't have any alpha, they're
| just designed to catch the eye of retail traders.
|
| Also this scumbaggery, from their website:
|
| "$70M+ Assets Committed*"
|
| Then way at the bottom:
|
| "* = "Assets committed" refers to captured user behavior in
| attempted investments and not to assets being actively managed."
| faangiq wrote:
| No dude. Zoomlennials are disrupting the market with their apps
| and TikTok ads. Because.
| vampiretooth1 wrote:
| I'd familiarize myself with overfitting
| (https://www.investopedia.com/terms/o/overfitting.asp). That's
| optimizing your portfolio to historical data so much so that it
| is no longer generalizable to the future.
| ProjectArcturis wrote:
| I'm well aware of overfitting, but it seems that these folks
| are not.
| tstewart314 wrote:
| Hey! One of the founders here. We're a recently launched
| roboadvisor explicitly for "high risk investing" and we develop
| these portfolios to make it easy to take advantage of more
| exotic strategies for those without the financial or technical
| knowledge to do it themselves (while providing tons of data,
| transparency, and recommendations). This blog post is a fun
| strategy poking fun at the recent popularity of "Inversing
| Cramer" and our own spin on it. Note that this isn't a live
| portfolio on our site.
|
| For these more fun ones (WallStreetBets, Nancy Pelosi) - these
| are specifically requested from our clients and we provide
| extensive data and recommendations to suggest portfolios to
| clients based on their situation. You can see for yourself: the
| WallStreetBets portfolio is down nearly 40%. Nancy Pelosi is
| flat - we don't hide that at all and instead make it very clear
| with large font. Our most popular strategy (pulls the most AUM)
| is the Quantbase Leverage Flagship, a portfolio based on this
| paper[0] with nearly 100 years of performance history.
|
| Yes we charge a fee on AUM. All robo-advisors do. This aligns
| incentives: we make (more) money only when you do. We're not
| for everyone, and even for those we are for we recommend on our
| front page to limit investment to a fraction of your total
| portfolio, but the thesis we believe in is solid: you can
| improve your absolute returns by taking a higher level of risk.
| We make it easier to do that intelligently, with proper data,
| and with the proper risk management. Happy to answer any other
| questions.
|
| [0]:
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701
|
| Edit: added "more" to clarify the AUM fee incentives alignment.
| ProjectArcturis wrote:
| >Yes we charge a fee on AUM. All robo-advisors do. This
| aligns incentives: _we make money only when you do._
|
| This is absolutely false. You charge a 0.94% management fee.
| That fee gets paid whether or not customers' portfolios go
| up.
| tstewart314 wrote:
| We can't charge performance-based fees as much as we'd like
| to with mass retail clients, according to the SEC[0]. Not
| charging except when a client portfolio beats a benchmark
| or profits counts too. AUM fees are considered by the SEC
| to be the best way to align incentives between advisors and
| clients.
|
| Furthermore, up to this point, we've been completely free
| for current clients to ensure we're providing value before
| charging anything.
|
| At the same time, we charge a fraction of the fees vs other
| "high-performance" oriented managed alternatives: Grayscale
| at 2%, Titan at 1%, typical hedge fund 2/20, etc
|
| We're VC-backed, SEC-registered, our goal at the end of the
| day here isn't a quick cash grab, it's to be a long-
| standing, sustainable, valuable experience for clients in a
| space (high risk investing) that currently lacks exactly
| those things.
|
| (and by the way: an AUM fee is just about the slowest way
| one could "cash grab", decades-old robo-advisors are barely
| profitable with it. It's not a high-margin business at
| all).
|
| [0]: https://www.sec.gov/rules/other/2021/ia-5733.pdf
| [deleted]
| calderwoodra wrote:
| Is there any reason to believe that Jim Cramer (or the inverse of
| Jim Cramer) would do particularly well in the stock market?
|
| I imagine following a cat picking random stocks works about as
| well.
| https://www.npr.org/sections/money/2013/01/14/169326326/hous...
| HWR_14 wrote:
| > Is there any reason to believe that Jim Cramer (or the
| inverse of Jim Cramer) would do particularly well in the stock
| market?
|
| Jim Cramer, before he was on TV, did well beating the market as
| a fund manager. So there is a good reason to believe he could.
| Whether he could televise his strategy to retail investors
| _and_ funds looking to profit from retail investors and make
| _his viewers_ money is a different question.
| cuteboy19 wrote:
| Inversing a pump and dump operation, provided it is well timed,
| can easily beat the market. Assuming that Cramer is a paid
| actor, this could probably be the case here
| vampiretooth1 wrote:
| When you say, paid actor, are you proposing that Cramer is
| being paid by some fund to pump a stock that they already
| have a position in? I don't know, but I believe it'd be
| highly unlikely given that he had a pretty good career as a
| fund manager himself, probably doesn't need more money.
|
| The article mentions (or links somewhere to this info) that
| there's no longer a Cramer pump, although there definitely
| was a couple years back
| kadoban wrote:
| > probably doesn't need more money.
|
| What's he doing on TV all the time then?
| vampiretooth1 wrote:
| Having fun? What are rich founders doing that are still
| at the helm of their own company, what are rich fund
| managers doing that have already proven their merit?
| kadoban wrote:
| Mostly making money because they don't know what else to
| do? Does anyone actually enjoy doing a ~daily tv show?
| Seems like a lot of work.
| askafriend wrote:
| Well it takes a certain type of person...and I guess he's
| that person. I'm sure he likes the attention.
| kadoban wrote:
| He probably also likes money. In my experience "has
| money" doesn't equal "can't be corrupt", to tie this back
| up a few levels in the thread.
| tomc1985 wrote:
| WallStreetBets had something that was like a fish in a fishtank
| somehow directing stock purchases, versus WSB, and WSB lost.
| asperous wrote:
| It was a YouTuber, possibly inspired by a 2012 stunt
|
| [1] https://www.youtube.com/watch?v=USKD3vPD6ZA
|
| [2] https://www.forbes.com/sites/rickferri/2012/12/20/any-
| monkey...
| tjs8rj wrote:
| OP's linked site Quantbase shows a WallStreetBets tracking
| portfolio with detailed performance history: https://www.getq
| uantbase.com/details?fund=r/WallStreetBets%2...
| eggbert12 wrote:
| [deleted]
| pavlov wrote:
| For taking a position against another growth stock hype luminary,
| there exists an inverse Cathie Wood index you can trade: an ETF
| with the ticker SARK ("short ARK"). It has done quite well since
| its inception last year.
| dominotw wrote:
| >done quite well since its inception last year.
|
| that probably doesnt say much though. what happens if its run
| since ark's inception?
| dehrmann wrote:
| This is also a problematic metric because of survivorship
| bias and as part of that, most investors showed up late to
| the game. Despite the fund having done well, it still could
| have a negative return over its life when weighted by AUM.
| pavlov wrote:
| A short fund like this is a trading instrument. I don't
| imagine anyone holds it for years.
|
| The fund makes its money on fees, not on price appreciation.
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