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Comment by Abishek_Muthian | Hacker News Reader

How does forums or subreddit like WSB work for stock advice? At-least on TV, the advisors would disclose whether they hold positions or did they advice their clients for the same stocks since they have a reputation to protect; In public forums won't everyone just advice based on their vested interest?

Are these forums large enough for the 'law of large numbers' to do its thing and that's what these analysts are looking for?

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It’s more or less equivalent to getting hot tips from 4chan. 95% dross, 4% illegal and 1% priceless insight. The fun part is figuring out which is which.

> 1% priceless insight

Are there real examples of this? Not "the stock was discussed on r/WSB and then went up," but a cogent line of validated analysis one would pay for on Wall Street?

No. Confirmation bias means that people who make good/lucky bets might look like sages, however even a blind squirrel finds a nut occasionally.

The DD (daily discussion) threads usually have more reasonable insights than the individual submissions.

From an outsider it looks as just luck that 1 out of 100 advices is useful although I guess the relevant part is the value of that 1%. In any case I don't know if I would trust a source of information like that in any other field.

Another question from a total ignorant is, if true, how is it possible that 1% exists and then... loop and wait until next post of investments pops up in HN.

There are 'DD' authors that manage to produce good insight and get 5-6 good predictions in a row but they are quite drown in other poor DD. See the ticker GME, someone with a pristine record predicted a GME pop following a console deal before the second COVID wave. Somehow he timed it perfectly (GME / Microsoft partnership annouced less than an hour after that post). That was a good DD and people apparantly made good money. Then it was followed by a tremendous amount of other poor posts (yolos, shitpost and 'gut feeling' DD) AFTER the surge. Without any information it is rather difficult to distinguish between the 'good' and 'bad' ones. There are some people tracking performances of different authors but I did not get to see an exhaustive study that would conclude one way or another.

Edit: ok nevermind the GME DD exemple. I tried to find it to link it here, but it is now deleted. People are claiming the author was a Microsoft Insider. Disclosing that info was highly illegal. I don't know what would be the legal ramifications of trading on illegal info when you don't know that said info is illegal. But I knwo that being investigated by a 3 letters agency is something you want to avoid.

https://www.reddit.com/r/wallstreetbets/comments/hr5f9i/chea...

This guy is a perfect example. He did a lot of posts early pandemic up until a month ago.

Best response: "Sir, this is the unemployment line."

Think of it as a real-time pump and dump. Professionals view it for sentiment validation - and there are several tools that already attempt and provide that on Bloomberg terminals using combinations of Webull, Stocktwits, and WSB to name a few.

Part of this is stock moves - but some are purely the underlying options, a lot more of what WSB trades. Given that (many) options have little to no movement (where little is < 100 contracts a day) cataloging and tracking this sentiment activity can be incredibly valuable, assuming you have all the data.

WSB is frequently temporarily disabled due to financial crimes. One of the mods was arrested in 2015.

The vested interest is the point. Why would you trust someone hyping a stock if they don't stand to benefit from any price rise?

> Why would you trust someone hyping a stock if they don't stand to benefit from any price rise?

Because they wouldn't be _hyping_ a stock?

If someone owns stock, they benefit from a price rise, so any evaluation is a reflection of that.

If someone doesn't own stock, they don't benefit from a price rise, but from rendering a correct evaluation.

Someone who doesn't own a stock benefits from the publicity. Peter Schiff has made a lot more money from books and his gold brokerage than investing in gold.

This is the natural contradiction in stock buying advice.

If the guy making the recommendation doesn't hold the stock, that makes his advice suspect as why isn't he following his own advice?

But if the guy making the recommendation does hold the stock, that makes his advice suspect as he'd profit just as much from promoting bad stocks as good ones. Isn't he just recruiting greater fools?

That reminds me of a question I was once asked: You're in the hospital and are about to have surgery. You see the surgeon, just before the surgery is about to start, reading up on the operation he's about to perform in a textbook. Do you trust that surgeon more, or less now?

Interesting question, but the answer has to be less. I don’t have to lookup certain Sql queries, or code syntax because I know it by heart. Pretty sure I can whip out a prototype without leaving the IDE. If he’s looking something up, even if just for a quick refresher, that means it stems from some sort of doubt / insecurity.

This is not a prototype, this is a surgeon performing production-level work. It's the same as if you had to whip out a basic service (as trivial as it core domain logic could be) but with all the details it need: deployment pipeline, monitoring, logging, a future-proof architecture (or do you want to be living with subpar heart surgery because the prototype was faster to deliver?).

The analogy breaks down very quickly, I just wanted to demonstrate how absurd your statement is.

It is entirely possible that looking at how to perform the procedure prevents fringe failures of surgery. Imagine your surgeon does his job extremely well but it turns out he performed the wrong surgery on the wrong patient because he trusted his memory too much.

Less. I want a surgeon to have done my procedure a good number of times already recently (if I get to choose.)

I disagree. Pre-X checklists exist because the reliability gained by going through step-by-step isn't easily replicated by other means. And, even if the surgeon has done your procedure every day this week, what are the odds they did it for someone with exactly your 'specs'? Surely there are considerations to be made based on age, gender, allergies, fitness level, and much more that it would be worthwhile to address prior to cutting into the patient.

Checklist, sure.

Textbook, no.

That level of specialization doesn’t really exist in the US outside of the Oklahoma Surgery Center. Surgeons do a kind of surgery, not a particular surgery. That’s part of why some Indian surgical places are so good; much, much more specialization than is the norm in North America or Europe.

In the US, it really depends on the surgery and the center. I know from chatting to some doctors that eye surgery for example, isn't exclusively cataract surgery, but it's like 60% of their surgeries and typically done by a handful of doctors. Back of the eye surgery is done at the same center, but by another set of doctors.

So while it's true it's not common to find the type of single surgery centers like they have in India, there are lots of surgeons who do the same surgery weekly or several times per week.

But yeah, if you're seeing an ENT at a smaller center, they might be doing 100 procedures a year and no more than 10 of any given type.

Huh? This is completely wrong.

For instance, I have Thoracic Outlet Syndrome. It's something really fucking shitty that overhead sports players and computer nerds are prone to (along with those with connective tissue disorders)

It's surprisingly super fucking hard to get right and general surgeons have fucked a lot of people up attempting to do it. Most famously, a Houston Astros pitcher was left paralyzed by the surgery, and his surgeon later ran into him homeless under a bridge. I think I have that linked in my more recent of comments.

Anyways, there are about 5 major hospitals in the U.S. with completely specialized Thoracic Outlet Surgery divisions within their vascular surgery wing of the hospital. These surgeons only do this one specific surgery - removing first/cervical ribs, sometimes along with two other involved muscles. My surgeon is Dr. Dean Donahue of Boston Mass General's Thoracic Outlet Surgery Program - arguably the most famous and successful practicioner of said surgery in the U.S./world.

Now, obviously, my condition isn't some special case. There's quite a few 'rarer' super specific medical conditions requiring a single specific surgery that larger U.S. hospitals (think Mayo Clinic, Cedars Sinai, Mass General, Cleveland Clinic, etc) do have devoted wings for with surgeons that only do that singular procedure in their otherwise generalized division. Not just the "Oklahoma Surgery Center"

Sorry if I misinterpreted what you were saying or if this otherwise seems like I'm ranting and rambling haha. Not trying to rant - just wanted to inform/give some insight.

And yet pilots often read checklists, even after thousands of flight hours. In fact, they are often required to. It is a way to make sure they don't skip steps that are important in case of emergency. Emergencies don't happen often, and it is easy to forget them when things become routine.

So it is understandable you want an experienced surgeon to do your procedure, but if a surgeon is reading a textbook, it doesn't mean he is less experienced than one who doesn't. He may be less confident, but if you consider the Dunning–Kruger effect, it is not necessarily a bad thing.

A checklist is quite a bit different from a textbook

Interesting question. Slightly related, the book The Checklist Manifesto argues for checklists in operation rooms, to prevent rare but disastrous cases like "scalpel left inside patient", or "wrong blood type administered".

So maybe a different version of the question could be: "Do you have more or less confidence in the operating team (surgeon, nurses) using a checklist?" After reading the book I would have more confidence.

I would rather surgical teams had industry-standard automated tracking technology with (for example) bar codes and radio frequency tags, than a checklist.

> industry-standard automated tracking technology with (for example) bar codes and radio frequency tags, than a checklist

The book referenced, The Checklist Manifesto, is worth a read. Checklists outperform automated tracking technologies because checklists don't silently fail.

Is there an independent reference for this?

In my experience, checklists almost always silently fail.

[Edited to add: 2015 column in Nature suggests studies giving positive results to checklists don't replicate: https://www.nature.com/news/hospital-checklists-are-meant-to... ]

> column in Nature suggests studies giving positive results to checklists don't replicate

"In a review of nearly 7,000 surgical procedures performed at 5 NHS hospitals, they found that the checklist was used in 97% of cases, but was completed only 62% of the time8. When the researchers watched a smaller number of procedures in person, they found that practitioners often failed to give the checks their full attention, and read only two-thirds of the items out loud9. In slightly more than 40% of cases, at least one team member was absent during the checks; 10% of the time, the lead surgeon was missing."

Yes, exactly... 64% of the time, in well-sampled professional surgical settings, the checklist was not even completed?

Try saying/doing that in the airplane industry. Pilots are trained to use the checklist in all operations.

I would like both please. Tracking technology helps with the specific example of tools left inside patients, but does nothing for things like accidentally amputating the wrong leg.

Both is fine, but given the choice I'd prefer to watch a member of the surgical team write with a sharpie on my legs.

Sure, but until then, a checklist could be a $100 dollar solution for a hospital in Zambia until there is more money for a more advanced system.

I remember chatting with some of the top US specialists in a specific field and they all freely admitted that after seeing a patient with a less common condition that they need to go back a give themselves a refresher. Unless it's something you see every day, it's almost impossible to keep all that information in your head.

That makes perfect sense if the person hyping the stock is relatively unknown and has minimal reach. Things get murky if an individual has enough of a following to move markets. If someone with enough clout, say Ackman or Dalio start pitching a particular stock, it's difficult to know whether they actually believe it will rise or if they hope to profit off others listening to them.

Advice from vested interests might not be always beneficial to the investor or the market e.g. From some one trying to short the stock.

> At-least on TV, the advisors would disclose whether they hold positions or did they advice their clients for the same stocks since they have a reputation to protect; In public forums won't everyone just advice based on their vested interest?

I'm pretty convinced that a number of people are profiting by buying a position, then making a post about why that's the correct position to be in, then after they the post position, they sell it to the people reading their post.

If you hold the position at the time of your post, that's considered evidence that you believe in the position and your advise.

/wsb/ is good for sheer entertainment and/or straight up gambling and is completely fine for 99% of people. It's also very bad for the occasional "I just lost my rent money what do I do" or that kid who killed himself after using robinhood.

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