A new starting point: the integration of traditional investment and cutting-edge thinking
At the end of 2023, an unexpected opportunity presented itself to me.
A colleague from JD Capital 10 years ago, who has now become a recognized super fund manager in the industry, invited me to co-found a new investment fund. After I ended my attempts at centralized AI application entrepreneurship for several years, this invitation was like a long-awaited rain. This long-term partner not only shared his investment insights and systematic thinking framework accumulated over the years, but also recognized my keen sense of emerging markets.
We quickly formed a cross-disciplinary elite team
Senior analyst in traditional financial market × Master of Artificial Intelligence, National University of Singapore
Macroeconomist × Industry expert
Systematic thinking tempered by time × a keen sense of emerging markets
This fusion of diverse backgrounds provides us with a rare perspective advantage - the ability to interpret market signals from multiple dimensions at the same time and discover opportunities that are difficult to capture with conventional thinking.
While most investment teams are still thinking in a single dimension, we have built a multi-dimensional analysis framework that spans traditional and emerging markets. It is this way of thinking that allowed us to go against the trend during the 2020 crash and reduce our positions in time at the peak of the bull market in 2021.
Today, when we return to the market as an "Alpha Sniper", we bring not only funds, but also the unique thinking system that this team has forged through multiple market cycles.
Sources of Opportunity: A Multidimensional Model of Information Asymmetry
In the late night discussions of the team, when we first completed the construction of the "Multidimensional Model of Information Asymmetry", we realized that the truth about how the market works is much more complicated than it seems on the surface.
Traditional thinking holds that there is an asymmetry in the time dimension of the market - those who know first make money. But in our model, information asymmetry exists in multiple interrelated dimensions:
- Time dimension : Who gets the information first?
- Depth dimension : Who understands the essence more?
- The Relationship Dimension : Who Sees the Invisible Connections Between Different Information?
- The self-reinforcing dimension : Who understands how market participants’ understanding of this information will evolve?
The market crash in March 2020 was not only a turning point for our team, but also an excellent case to verify this model. At that time, on the surface, everyone received the information about the "epidemic outbreak" at the same time (equality in the time dimension). But the real asymmetry appeared in other dimensions:
Few people understand that this is a liquidity crisis rather than a value crisis (depth dimension)
Very few people link monetary policy, institutional deleveraging needs and safe-haven asset characteristics (correlation dimension)
Few foresaw how the shift in market sentiment from panic to inflation concerns would affect asset revaluations (self-reinforcing dimension)
It is at the intersection of these asymmetries that we find the true source of "alpha".
Probabilistic Network Thinking: The Art of Investing Beyond Certainty
We once naively thought that investment was a process of finding certainty. It was not until we experienced many "certain opportunities" turning into losses and "uncertain guesses" bringing huge profits that we began to embrace a new thinking framework: probabilistic network thinking.
Rather than being a linear system of deterministic events, markets are more like multi-body systems in physics—each event has multiple possible outcomes with different probability weights, and these outcomes themselves change depending on the reactions of market participants.
In May 2021, when the market was generally optimistic, our internal memo stated:
"We are not facing a single possible path, but a bifurcated probability tree. Although the probability of continuing upward is still 60%, the probability of branching downward has increased from 15% last month to 35%, and its expected loss has increased significantly. According to the expected value calculation, the position should be reduced by 50% now."
This record reflects our practice of applying probabilistic network thinking - not predicting a single outcome, but mapping the entire possibility space and then making decisions based on probability-weighted expected values.
This way of thinking allows us to make optimal decisions in moments of highest uncertainty because it accepts uncertainty as an inherent property of the market, rather than a flaw that needs to be eliminated.
Reverse empowerment: transforming limitations into unique advantages
While most investment teams view their limitations as shortcomings that need to be addressed, we discovered the power of reverse empowerment—turning our biggest disadvantages into our most unique advantages.
Our relatively small bankroll is a disadvantage, but it gives us extreme flexibility.
Our lack of a large Wall Street-style research team is a disadvantage, but it frees us from the constraints of traditional thinking.
The diversity of our team members is a sign of "distraction", but it allows us to build unique connections across markets.
In June 2022, when a large project collapsed and the market fell into panic, we did not try to "eliminate" the impact of market panic, but analyzed it in depth: "If we - a group of relatively rational investors - also feel so uneasy, then what will be the degree and duration of fear of ordinary market participants?"
In this way, market sentiment is no longer a noise that interferes with decision-making, but a signal receiver for interpreting the market. We regard our own psychological state as a sampling point of the entire market psychology, thereby building a richer market sentiment model.
This reverse empowerment thinking allows us to no longer pursue becoming a "perfect investment team", but to become a "unique investment team" - using our own diverse perspectives to perceive this equally diverse market.
Metacognitive Investing: Thinking About How We Think
Most investors only focus on "thinking about the market" and ignore the meta-level of "thinking about how they think about the market."
When we began to record our thought process for each investment decision and reviewed and analyzed it after the results were revealed, we found a surprising pattern: 80% of wrong decisions came not from insufficient information but from automatic switching of thinking modes.
In an uptrend, we unconsciously switch to trend continuation thinking.
In times of high uncertainty, we default to a search for certainty mindset.
When faced with losses, we activate risk aversion thinking.
After realizing this, the team designed a "thinking mode monitoring system" - before each decision, it first identifies the current thinking mode, evaluates its applicability, and forces a switch to a more appropriate mode when necessary.
The cultivation of this metacognitive ability enabled us to realize when the market crashed in March 2020: "Now we are in panic thinking mode, which is not suitable for the current situation. We need to switch to reverse thinking mode."
System dualism: the dialectical unity of big trends and small certainties
There have long been two opposing schools of thought in the investment field: the macro trend school and the micro deterministic school. The former focuses on the general trend, while the latter focuses on individual cases. Most investment teams belong to either the former or the latter.
After years of practice, we have built a higher-dimensional framework - system dualism. Its core lies in:
- Megatrends determine the boundaries of the possibility space
- Small certainty determines the optimal path in this space
- The two are not opposites, but manifestations of the same system at different scales.
At the end of 2021, when market analysts were debating whether it was the middle of a bull market or the beginning of a bear market, our investment memo wrote:
"The macro cycle has clearly turned downward (liquidity tightening, leverage reduction, weakening investment sentiment), which sets the boundary of possibility for the next 12-18 months. But in this downward cycle, there are still 3-5 structural opportunities with extremely high certainty, which will create an upward tributary in the downward trend that is opposite to the general trend."
This kind of systematic binary thinking allows us to accurately capture several micro-upward sectors while recognizing the macro-downturn, achieving partial harvests in the bear market.
Narrative Evolution Theory: The Genetic Code of the Market
After reflecting on thousands of investment decisions, we found that the market is essentially a complex adaptive system driven by narrative. Narrative is not just a language to describe the market, it is the building block of the market itself - similar to genes in living organisms.
We developed a theory of narrative evolution that breaks down market narratives into basic units and analyzes how they replicate, mutate, compete, and merge, thereby predicting the evolutionary path of dominant narratives.
This theory has four core observations:
- Narratives follow a classic S-curve, from fringe to mainstream to decline
- Strong narratives absorb and integrate the core elements of weak narratives to enhance their resilience
- There is a "predator-prey" relationship between narratives, forming a complex ecosystem
- The speed at which a narrative evolves is proportional to the efficiency of the channels through which it is disseminated
In early 2022, when the emerging technology narrative began to emerge, we used the narrative evolution model to analyze and predict:
"This narrative will absorb core elements from multiple related fields within six months and become the dominant narrative. But its evolution will slow down after it hits regulatory and technological limits and will be replaced by a new narrative in early 2023."
This prediction is highly consistent with subsequent market developments, allowing us to make early arrangements at key points in narrative transition.
The paradox of compound interest thinking: the art of subtraction
The investment field generally advocates compound interest thinking, but few people understand that the true essence of compound interest is not "addition" but "subtraction" - reducing interruptions and losses in the compound interest process.
Our team has derived a simple formula:
Final result = initial capital × (1 + annualized rate of return) ^ number of years × continuity coefficient
Most investors focus on improving the annualized rate of return, but ignore the key variable of continuity coefficient. Even if the annualized rate of return increases from 20% to 30%, if the continuity coefficient drops from 0.9 to 0.6, the final result will drop significantly.
After understanding this, our investment strategy has undergone a fundamental change: we no longer pursue maximizing single returns, but maximizing the continuity of returns. This means:
Reject high-yield bets that could wipe out your bankroll
Prioritize strategies that have moderate returns but are highly sustainable
Shift the focus of risk management from "controlling single risks" to "ensuring game continuity"
This seemingly conservative strategy, under the long-term compounding effect, can produce results far exceeding those of aggressive strategies. As we often say: "In investing, it is more important to live long enough than to live fast enough."
Sniping the future of ballistics
Participants in the investment market can be divided into two categories: followers and snipers.
Followers always fire at the targets they see - buying when prices go up, selling when prices go down. They always fire at the reality that has already appeared.
The real market snipers never shoot at the current position. Just like world-class snipers calculate wind speed, gravity, trajectory and target movement path, and top baseball players predict the rotation, speed and falling arc of the ball - they aim at the future position a few seconds later.
In the investment world, this means understanding and anticipating:
The inertial trajectory of capital flow
The dynamic changes in narrative evolution
Turning points in market psychology cycles
Synergistic effects of institutional and technological changes
It is this ability to predict the future that allows us to complete our layout before the market reacts, establish positions before consensus is formed, and lock in profits before trends are confirmed.
In this era of information overload, holding a large amount of capital is no longer a decisive advantage. The real marginal advantage comes from high-dimensional thinking - the ability to identify deep patterns in seemingly disordered markets, find causal relationships in chaotic price fluctuations, and make decisions beyond the conventional thinking framework at critical moments.
For investors with long-term capital and high cognitive ability, the market is not a zero-sum game, but an opportunity to verify your thinking model - when your thinking dimension exceeds the mainstream market, wealth is just a by-product.
The mission of Alpha Sniper is to
The above is the thinking framework that our team has extracted from years of investment practice. This is not only a set of investment methodology, but also a way of thinking in the face of an uncertain world. In this increasingly complex market environment, we believe that the real advantage no longer comes from the information itself, but from the framework and perspective for processing information.
