nobody is trading, especially not the big guys. the only people trading in the sense of trading are brokers (not the bucket brokers).
the big guys are investors just as well, paying more attention to instrinct value than anyone would ever guess.
the big guys are owners and mathematicians paired with economy and lots of financial knowledge.
when funds/hedgefunds invest into a equity then they do not invest bcause they think that the price should go up 25% in the next 1-2 years because the brand behind it is cool or in the news right now or because TA signals a rise (TA is pretty unimportant in the true fields of investing, it is considered similar to astrology). they calculate the instrinct value compared to incoming cash beeing 25% higher than it is right now, so they buy and wait for the 25% and sell once the 25% arrived, or- whats more likely, once the 25% gain happened they calculate again with new numbers if something changed and when they see another 25% value rise, stick to the investment.
an example: company A earns 1.3 million in earnings before interest, tax, depretiation and ammortization (EBITDA)
Company A’s market capitalization is 10 million
This means a EBITDA of 13% or in other words, if you want to buy the company you need 7,7 years to pay off the investment by the income the company is generating before taxes ammo.-depr.
Other companies in the same sector trade at 10 years EBITDA/INVESTMENT
so the instrinct value of cmpany A is 13 million and not 10 million.
You have a discount of 23% and a upwards potencial of 30% once you purchased company or the at least some shares of the company. when others see it trades for less the discount is more likely to close to 0% (meaning you gain 30%) than to widen (meaning you losing).
This closing can happen within a week, or a month or a year, sometimes it takes longer for the market to realise the gap and to close it.
this is for small new commers company and as well for developed market players, the same practice.
successfull investors (billionaires): warren buffet
? who? name him please.
there is no need to ask the question of if trading or investing is better. history itself and a lot of statistics prve that if you want to make money, you must be an investor and not trader.
and btw trader is such abroad term that this question can not even be asked properly. investors as well, investors exists in all industries and shapes and forms.
the real money comes from investing, the dreams come from trading.
Check your surrounding, you dont need to go into wall street to answer the question.
In yoour surrounding the people who are wealthy are the ones who own something, a business, lad, real estates etc. those are all investors paired with some knowledge of how to run a business. any mcdonalds next to you has 3 investors, the mcdonalds company, the share holder of the mcdonalds shares and the franchise partner who invested the money into the location next to your house. have you ever seen a mcdonalds franchise partner go broke?
Same goes for realestate, a hotel is not owned by the chain thats managing it, the real estates belongs to a investor, this can be a real estate fund, a wealthy individual, the government etc. the management is owned by a chain company, which is owned by investors who hold shares. they all earn money, and compared to the little fluctuations of 5%+/- on the share price and the potencial a “trader” could earn on this moves in a year, their gains are way higher.
anyways, the bottomline for this question is the same: you need money to make money. with 1000 you wont get anywhere, with 10000 you wont get anywhere, with 100.000 you have some sucess rate that can be statistically significant.
you cant go from 0 to investor, nobody managed that besides warren buffet who took in loans from friends and family to start his first investment. you must first earn money with your knowledge and good old hands on work and later once you got money you can start thinking of becoming a investor or “trader”.