Multimedialne seminarium z ekono- i socjofizyki

A common misconception about investing strategies is that they need to be kept in secret in order to work. The idea is that once a profitable strategy — some phenomenon or precise algorithm of investing behavior — becomes known, investors flock to it and it becomes depleted, the returns of the strategy drop to zero. This is most often not the case. While it is true there are some highly secretive firms in the investment space, an informational advantage is just one of several types of inefficiencies exploited by profitable investment approaches. In this talk, I will present some examples of known, yet profitable strategies, examine their returns and discuss how they stay profitable. I will start with a portfolio toy model and switch to empirical examples of functioning strategies. I will supplement the talk with empirical data from the quantitative research community and quantitative investment space.