Retail investors vs. hedge fund managers: who wins? Ex-Tudor quant PM Tom Costello (20%/yr, 1.4% max drawdown) DEBATES Market Wizard Chris Camillo ($20K → $80M, tells you to expect 70% drawdowns). Chris Camillo (@ChrisCamillo) turned $20K into ~$80M over 18 years, audited by Jack Schwager for Unknown Market Wizards at 77% annualized. Founded TickerTags, sold to Jefferies. Co-founder of Dumb Money. Tom Costello (@tcoste110) ran money at Tudor, Moore Capital, and Caxton. Started as a quant on JPM's exotic swaps desk. Now CIO at Bedrock Digital Assets. We cover: - Why a 50% drawdown is "a career-ending event" for a PM and "completely rational" for a retail investor with a 20-year horizon - Chris's case that everyone should have a levered, concentrated risk bucket, and expect a 70% drawdown in it - Tom's pushback: "At least half of the aspiring engineering students who wanna be day traders are gonna go broke" - Why hedge funds don't beat the S&P, and why that's a category error - 3x leveraged S&P ETFs held for decades: ~1.85x market returns, and the futures roll cost buried inside - The e.l.f. trade: one YouTube video, a full day sitting in a Walgreens, and every cosmetics analyst on Wall Street asleep - Chris spent 5 years selling social data to the biggest funds. They couldn't institutionalize it because "the words keep changing" - Vita Coco: a viral TikTok sound → the biggest quarter in company history → +34% on earnings - Tom's bet: LLMs hand social arb to the quants. Chris: "there's still plenty of time" - "I know very few day traders who ever made anything like real money" - Why Chris gives the strategy away after an 18-year run Highlights: 00:00 Intro 00:50 Who's better positioned to take risk: retail or hedge funds? 05:58 A message from ONYX 06:30 Why a 50% drawdown is rational for concentrated retail capital 08:57 Beta vs alpha: what two-and-twenty actually pays for 18:56 Should retail embrace 70% drawdowns? Bucketing risk capital 23:59 Can ordinary investors really compound 2–3x market returns? 30:08 Fair value, mistakes, and why 99% of day traders lose 35:32 Are 3x leveraged S&P ETFs a long-term buy? 43:31 Too big to fail: AI concentration and the case for leverage 46:06 Situational Awareness, crypto correlation, and overfit backtests 53:44 Social arb explained: Beacon Roofing, Hunger Games, Stranger Things 01:01:07 Is social arb crowded? Tiger Cubs, Ticker Tags, e.l.f. 01:07:42 Will Citadel and LLMs arb away TikTok alpha? 01:17:09 Incentives: why "hedge funds don't beat the S&P" is a category error 01:19:35 Why Chris shares social arb: $20K to $80M and the wealth gap 01:25:45 Closing: retail freedom vs institutional resources