
Take $1,000, Trade Once a Day, Make $264 Billion—You Could Have Done It in 2013 - r0h1n
http://www.theatlantic.com/business/archive/2013/12/take-1-000-trade-once-a-day-make-264-billion-you-could-have-done-it-in-2013/282386/
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gametheoretic
1\. Win the lottery

2\. Spend 100% of winnings on lottery tickets

3\. Win all the lotteries.

4\. This is stupid.

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uniclaude
This is exactly what I thought while reading the article, and yet, this
comment made me laugh so much.

This said, as written in the article, one will likely affect the stock price
when trading a large amount of shares, while buying a single good lottery
ticket for all the lotteries might be more of a transparent operation.

If TheAtlantic wanted more page views they could surf on the Bitcoin hype and
the trader could have bought bitcoins some day in March or April and make even
more. Someone should do a similar analysis based on the cryptocurrency market,
it would be equally flawed, but might still be funny.

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rhizome
The Atlantic's "Digital First" initiative ensures that we will see less of the
magazine that has been good for the past 150 years and more of this kind of
crap. They are pretty much squandering their legacy.

[http://mashable.com/2011/12/19/the-atlantic-digital-
first/](http://mashable.com/2011/12/19/the-atlantic-digital-first/)

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eof
Much easier way you could have done it one night!

take 1000 and bet black or red on roulette, then let it ride 27 times and get
them all right. easy

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manuelflara
Well, at some point you would've hit amounts no casino can work with, so even
if you could see the future, that's no way to make even $1B :)

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birken
I think it might also be difficult to sell 263 billion dollars worth of ADBE
stock today considering the entire company has a market cap of 30 billion.

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tedunangst
You could theoretically plow that much money into call options because there's
no physical limit to how many people can write the option and take the
opposite position. (ignoring position limits, which the exchange would
probably notice at some point.)

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georgemcbay
Obviously the trades themselves and the shares available would alter the
numbers, and the article mentions this at the end.

While they can't really adjust for the first issue without a crystal ball,
this would be far more interesting to me if they factored in at least a rough
estimation of how many shares you could reasonably buy (even if they assumed
the company's outstanding shares were fully liquid in a perfect market) and
not had you holding 264 billion dollars worth of shares in a company with a 29
billion dollar market cap at the end. IMO, that would have made for a more
interesting data modelling story.

If the point is just pure fantasy of big dollar numbers based on large
percentage moves they might as well have included very small penny-stocks and
really goosed the number up.

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ChuckMcM
In terms of shares you could buy, probably up to about 10% of the 200 day
rolling average of the daily volume. It still works if you spread that over
the top performing stocks for the day (staying under the 10% cap). But you are
moving a lot of shares by the end of the year :-)

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trimbo
How about collecting $1 of ad revenue on 264 billion click-baity articles?
That's The Atlantic's plan.

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mwc
The article is quite clear that it's a totally unreal hypothetical:

    
    
      Of course, once your investment had grown past a certain 
      point, it would be impossible to put into any stock
      without drastically affecting the stock’s price. In many
      cases, investing this volume of cash would be
      impossible [...] we also did not take into account
      trading fees nor changes in the composition of the S&P
      index. We also assumed that all companies allowed for 
      investment in fractional shares.
    
      Moreover, even if one made the impossibly optimistic 
      assumption that picking the best stock of the day is a 
      50-50 guess, there would be only a one-in-3.53 
      trevigintillion (3.53 x 1072) chance of matching these 
      results.
    

There's another humorous follow up on Quartz, positing that "[i]nvesting a day
late every day would have returned 19.6% in 2013".[0]

[0] [http://qz.com/158489/investing-a-day-late-every-day-would-
ha...](http://qz.com/158489/investing-a-day-late-every-day-would-have-
returned-19-6-in-2013/)

Edit: spelling.

~~~
caprad
A lot of people here seem very upset that this isn't a recipe they can follow
to riches. Clearly this is just an exercise illustrating wild growth, and an
interesting article. No need for people to be so bitter.

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svmegatron
We're missing the point here: this is not a "how I made $264 billion selling
my ebook" guide that we're supposed to replicate. Rather, it's a "WHOA
COMPOUND INTEREST" thought experiment.

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ahmadss
that's exactly what i thought - the power of compounding is amazing to look at
when you see it in action with higher dollar amounts.

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midas007
No, this wouldn't work in the slightest. The "hypothetical" account would soon
have the pains and limitations of an institutional investor... it would move
markets so much that this wouldn't be possible to make trades as described.

Perhaps a quant can run this on a market simulator using historical data and
show how much it would diverge from reality.

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jcampbell1
Did you come up with this yourself, or are you just summarizing the end of the
article?

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eruditely
Obviously the effects of trading are non linear and moving that kind of money
would significantly altered the return somewhere. However it's cool to look
at.

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twoodfin
Yeah, "somewhere" is right. This calendar has our mythical time traveler
buying over $200B of Adobe stock. The only problem is that Adobe's market cap
is a mere $30B. There isn't $200B worth of stock to buy!

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scarmig
If someone's willing to pay 200/30 ~ 7 times the current market price to buy
Adobe stock, well, I'm sure there current shareholders would be more than
happy to oblige the time traveler.

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jerf
It's unlikely the stock would go _up_ after such a transaction, though.

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programminggeek
I don't know the exact quote but Warren Buffet has explained before that there
are a lot of great investments you can make if you have thousands or millions
of dollars to invest, but once you start getting into the billions, it's a lot
harder to get that same return.

In my own experience, almost anyone can make hundreds of dollars, It's not
super difficult to make thousands, but as a single person, scaling into the 6
or 7 figures usually requires working/partnering/networking with other people.
A lemonade stand or a bake sale or yard sale is natually limited by location
for example.

Another relevant example is Bingo Card Creator. You could argue that Patrick
has just about maxed out what is possible to make selling bingo card software
on the internet. It is no surprise that his second product Appointment
Reminder has a much higher ceiling and I'm guessing that it makes a lot more
than BCC does by now.

No matter how much effort Patrick put into BCC, getting past 100k a year would
be a festivus miracle. Appointment Reminder could very reasonably hit 7
figures, but 8 figures would probably require a full on sales force, support
staff, etc. and even then it would be a real push.

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conjecTech
This just in: compounding interest exists. But seriously, I don't know what
the point of this article is. It doesn't even consider the fact that the
amounts it's talking about eclipse the market cap of just about all of the
corporations it's talking about.

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nols
Yes it does, it specifically states that at the end. It's a silly
hypothetical, not meant to be a step-by-step guide.

~~~
conjecTech
You are indeed correct. Good catch. I literally stopped reading after the
first sentence of that paragraph.

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JimmaDaRustla
At a micro level, this makes sense - you can expect to buy a few thousand in
an equity and expect the price not to fluctuate due to your investment. But
when you hit millions, I'm sure the price range by the single purchase will
have a significant impact to the cost of these stocks - you would be buying
more than what is available in some cases, sometimes even expecting to invest
more than what the company has in market capital.

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tbrooks
Another way to make $264 billion in 2013, buy a Powerball lotto ticket every
day, and pick the 5 winning Jackpot numbers. Repeat 364 times.... you're rich.

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rb2e
Then once you've made 264 Billion, create a blog, books, videos and courses on
how you did it to create a sustainable business.

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mathhead
The point is that finding the the best performing stock each day is just
impossible. No Technical or Fundamental study can give you that.

It's just like, I could have been a trillionaire had I invested in Google,
Apple, Microsoft, Cisco, Facebook: all in their seed stage.

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navpatel
Yikes! Nobody tell the author about options. It might cause their brain to
explode.

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MidsizeBlowfish
In addition to the preposterousness of investing more than a company's market
cap, I'd be interested in seeing this strategy backtested. Lots of random crap
works over short time scales.

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brianobush
You cannot simply move a billion dollars into a single stock that easily. The
act of buying a billion dollars of any one company would alter the stock price
significantly -- like a buyback.

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justinph
Fun to think about, but I'm pretty sure you'd have trouble buying a billion
dollars of any stock every day, much less $100 billion towards the end.

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Untit1ed
In conclusion, you should invest in time travel research.

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robomartin
I am surprised nobody has mentioned short-term capital gains taxes.

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gfodor
yet another article that can serve as evidence we are nearing a market top.

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a3voices
1) invest in bitcoins

2) wait

