Yeah, I hear ya. My "systematic profits" comments was in reference to a few firms and individuals I've observed over time. These people have some sort of structural or informational edge in the markets.
There are commodity trading firms that are such substantial players in the markets they trade that they control that market. Certain High Frequency firms have scale and breadth of resources to get higher quality data, faster connections and hire guys that rewrite Linux process schedulers in assembly. Warren Buffet's secret weapon is that he never sells (so you never realize a loss!).
The point being - anything else is gambling. And these guys - who look at a market structurally instead of some sort of casino - will eat your lunch in the long run. Their "edge" is actually orthogonal to price fluctuations.
Roughly speaking - if you mark an asset lower than its purchase price you have an unrealized loss. You still hold the asset and - if you're taking the super long-term investment horizon view as Buffet does - eventually your asset will go up. In addition, Buffett gets into investments that probably wont have their business models disrupted anytime soon - and are tied to the success of the USA as a country: railroads, insurance, housing.If he does his stock picking right, he doesn't need to sell...
That's not correct for public companies - the unrealized mark to market losses will be reported as losses via correctly (mark-to-market) valuing the asset on the balance sheet.
There are commodity trading firms that are such substantial players in the markets they trade that they control that market. Certain High Frequency firms have scale and breadth of resources to get higher quality data, faster connections and hire guys that rewrite Linux process schedulers in assembly. Warren Buffet's secret weapon is that he never sells (so you never realize a loss!).
The point being - anything else is gambling. And these guys - who look at a market structurally instead of some sort of casino - will eat your lunch in the long run. Their "edge" is actually orthogonal to price fluctuations.
Just my 2 cents.