The (Working) Theory of Weird Markets

Summary

Andrew Walker presents a rough draft of his Theory of Weird Markets, arguing that the stock market is the most competitive game and that traditional strategies are increasingly dominated by quant funds, AI, and machine learning. He uses sports and Rubik's Cube analogies to show how winning strategies can look counterintuitive as competition intensifies, and argues individual investors must seek weird, N-of-1, fat-tail opportunities. He highlights AI power demand, spin-offs, unique events, and Warner Bros. Discovery as examples, and invites listener feedback to refine the theory.

• Andrew Walker introduces the Theory of Weird Markets as a framework for his 2026 investing.
• He argues the stock market is the world's most competitive game, with traditional strategies dominated by pod shops, quants, and AI.
• Sports and Rubik's Cube examples show how optimal strategies evolve and can appear counterintuitive.
• AI in chess and poker illustrates machine learning discovering non-human, aggressive strategies.
• Walker identifies weird, N-of-1, fat-tail situations as the remaining alpha sources for individual investors.
• He cites AI power demand, spin-offs, unique events, and management incentives as areas to watch.
• He discloses a long position in Warner Bros. Discovery (WBD) due to a rare bidding war.
• He seeks listener feedback to refine the theory before publishing his annual outlook.