2026-01-07 08:29:02

Many investors consider pursuing excess returns (Alpha) as the holy grail. The logic is simple: beating the market is never wrong. Indeed, it’s not wrong. But there’s a trap here — your Alpha performance entirely depends on the overall market sentiment.

If the market trend is not favorable, no matter how impressive your Alpha is, it’s useless.

Think of it this way: there are two investors, Alex and Pat. Alex is particularly skilled, earning 5% more than the market each year. Pat is less skilled, earning 5% less than the market each year. The result is obvious — Alex’s annual returns are 10 percentage points higher than Pat’s.

But what if they choose different entry times?

That’s when the story reverses.

Market cycles are brutal. Sometimes there are big rises and falls, sometimes there’s sluggish consolidation. An excellent investor who enters at the wrong time might perform worse than an average investor who times the market correctly. Alpha can indeed help increase your returns, but what truly determines whether you profit or lose is often Beta — the market’s own upward or downward trend.

In other words, rather than spending effort chasing Alpha, it’s better to ensure you catch the Beta tailwind first. Timing and direction are often more valuable than technical skills.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

11 Likes

Reward
11
7
Repost
Share

Comment

0/400

AirdropHarvester

· 8h ago

Honestly, instead of obsessing over how to beat the index every day, it's better to get the big picture right first—that's the key. This article is excellent; I used to fall for this... studying stock picking techniques every day, but as soon as the bear market hit, everything was lost. Instead of wasting effort chasing Alpha, it's really better to bet on Beta correctly. If the market doesn't give face, everything is pointless. So, I realize that predicting the cycle is a thousand times more important than picking individual stocks. I finally understand. Damn, why didn't I think of this logic before? Timing really can decide everything. Alpha may look impressive, but it's really all about luck. Now I'm just thinking about how to ride the market rhythm correctly. I've had a bit of an epiphany; no wonder some people make money just by buying casually, while others lose even if they're very skilled. That's why I'm no longer pursuing excess returns; catching a ride is more appealing. Entry timing > stock picking ability. This really woke me up.

View OriginalReply0

GateUser-5854de8b

· 01-07 08:56

Damn, I really spend every day studying stock picking techniques, but it turns out luckier to just catch the right timing... I'm telling you, those who made a fortune last year through hype had no real skills, they just got in early and rode the wave at the right moment. This article hit me hard, I feel like I'm just that fool chasing Alpha every day. Forget it, I should just wait patiently for the right opportunity. Randomly picking stocks is really a waste of time and intelligence. That's true, but how to grasp the direction? It's even harder than stock picking. I think this guy is wrong. There's no such thing as a Beta ride now... it's all just oscillations.

View OriginalReply0

DaoDeveloper

· 01-07 08:52

honestly, this alpha/beta framing just clicked something—it's like saying you can optimize your smart contract all day but if you're deploying on the wrong chain at the wrong time, game over. timing >> technical excellence, fr

Reply0

ProofOfNothing

· 01-07 08:37

A month ago, people still hyping Alpha are now crying and shouting to sell. Forget it, sticking to the right rhythm is always better than anything else. Timing the entry point really can decide everything. Studying technical analysis every day, what's the use? Luck is the best strategy. I think, instead of wasting effort chasing excess returns, it's better to wait for the market's good mood. Beta is the real deal; Alpha is all虚假. This article is spot on. I learned this lesson last year. Getting the timing right, even a rookie can make money. Alpha? Wake up, everyone. First, stay alive before worrying about anything else.

View OriginalReply0

GasFeeVictim

· 01-07 08:36

You're still hyping Alpha as the golden key, but a whole bear market has wiped it out haha Timing is everything; even a rookie can turn things around if they get it right. That really hits home Beta is the real boss, Alpha is just a false name—my blood, sweat, and tears lessons It's better to enter the market late than early; I finally understand this wave of行情 Instead of researching how to beat the market, it's better to first figure out where the market is headed Can't grasp the right entry timing, even the best investors are just throwing money away Basically, it's saying—luck beats skill, and lying down to win beats hard work

View OriginalReply0

SmartContractDiver

· 01-07 08:31

Damn, is entry timing more important than technical analysis? Then all my years of stock-picking skills would be wasted... --- At the end of the day, you still have to bet on the right trend; just being good at stock selection isn't enough. --- I accept this logic; chasing Alpha really is hard and unrewarding. --- No wonder I lost money; I timed it wrong, that's for sure. --- So ultimately, it's all about luck, right? --- The beta's tailwind is more attractive than Alpha's technical skills, that hurts. --- That comment hits too close to home; I am the one who picks good stocks but misses the boat. --- Got it, from now on, focus on the big cycle instead of stock selection.

View OriginalReply0