I'm not sure there implementation of inverse in stock strategies, but assuming the basis is returns proportional to market rate x, that logic doesn't really follow for all cases I think. If the random strategy has gains of 1x and the non-random strategy has a loss of -0.5x, then wouldn't the inverse just be a gain of 0.5x?
If the non-random strategy was “buy stocks A, B, and C”, the inverse might be “the broad market minus the stocks A, B, and C” rather than “short stocks A, B, and C”.
Hmm, let's call "buy nothing" a neutral strategy. Then a combination of “buy stocks A, B, and C” and “short stocks A, B, and C” has the same effect as the neutral strategy. But the combination of “buy stocks A, B, and C” and “the broad market minus the stocks A, B, and C” is equal to "buy everything" and has not the same effect as the neutral strategy.
You seem to assume "buy everything" to be the neutral strategy. Then everything plays out as you say.
That's true but still doesn't map here. Or at least, to my interpretation of it.
Stock-picking is specifically referring to where you should allocate a given amount if you are investing. There's obviously more to stocks than simply picking them, but as for picking specifically, there's no analog in poker because you don't divide your bet that way. (Aside from raising on a bluff, but that's stretching it).
Whether, when, and how much you should invest is a separate strategy that's related to your confidence and expected return of the picking strategy—but not the same thing.
Just like whether and when you agree to a game of chess vs tic-tac-toe might depend on your confidence in your skills; but that decision is _not_ relevant to chess strategy, which assumes you're already playing the game.
This still doesn't make sense to me. If the return of inverse strategy S' were greater the loss of strategy S, couldn't you then guarantee a positive return by using both strategies simultaneously?
