Stop Chasing Other People's Alpha

Noah Kagan

@noahkagan·May 7

I have a friend with a $50M stock portfolio.

I’m jealous of him. We’ve had roughly the same time horizon. He put his energy into picking stocks, I put mine into AppSumo and indexing on the side. His returns have absolutely crushed mine. Not even close.

And every time we talk about it, the same thing happens. I get this itch. Maybe I should make some trades. Maybe I should pick a few names and try to catch up. Nothing crazy, just some moves to juice my returns.

Then I actually asked him how he does it.

• He calls employees of the companies he’s looking at.

• He sits through earnings calls.

• He uses the products at a depth most people never bother with.

It’s not “read a Substack and buy the ticker.” It’s a job he treats like a job.

That’s when it clicked. He’s a professional. I’m a hobbyist.

And the reason my hobby trades would lose to his professional ones isn’t IQ or luck. It’s reps and time. He’s putting in the work I’m not putting in.

The same is true in reverse. He could spend a year trying to compete with what we’ve built at AppSumo and he’d likely lose. Not because he’s not smart. Because I’ve spent 15 years in this seat and he hasn’t.

The lesson I keep coming back to: everyone has some alpha. A thing where they’ve actually earned the edge. The trap is when you start looking sideways at someone else’s alpha and try to half-ass your way into it. That’s not investing. That’s distraction.

You can be a professional stock picker and still suck. You can be a professional founder and still fail. But you have zero shot as a hobbyist trying to beat a professional at their own game.

If you’re not the professional, hire one. Or just ask the people who are. Most of them will tell you exactly what they’re doing if you actually ask. Copy from the best instead of guessing on your own.

So I’m back to indexing and chilling on the stock side. And spending the real reps where I actually have alpha. Running AppSumo.

You’re not losing because you’re dumb. You’re losing because you’re playing someone else’s game on their home court. When you chase other people’s alpha, you volunteer to be the amateur sparring partner for a seasoned pro. This post is about quitting that game, doubling down on your real edge, and letting the rest be boring on purpose.

Alpha Is Earned, Not Subscribed To

Noah’s friend doesn’t beat the market because he skimmed a newsletter and yolo’d into tickers. He treats stock picking like a brutal, boring, full-time job. Calling employees. Sitting through earnings calls. Deep product use. That’s not vibes, that’s volume of reps. Alpha is rarely a secret insight; it’s usually thousands of unsexy, compounding decisions inside one domain.

The Psychology Behind Looking Sideways

Envy whispers that you can “just do a little” in their lane and catch up. That’s the trap. You dilute the one place you’re actually world-class to chase crumbs in someone else’s sandbox. A much simpler rule: treat every new arena as either a profession (go all in for a decade) or a utility (outsource or index). Nothing in between.

Stop Losing To Pros On Their Own Turf

Recognize where you’re the hobbyist and they’re the professional (and stop pretending it’s a fair fight).
Make your “boring” lane (indexing, delegation, simple systems) the default everywhere you don’t have an edge.
Concentrate time, risk, and obsession only where your reps are already stacked.
If you truly need exposure to someone else’s game, hire a pro instead of role‑playing one on weekends.

Real-World “Stay In Your Lane” Plays

AppSumo focuses its real risk and obsession on building the marketplace, while Noah Kagan keeps his personal investing brain-dead simple with indexing.

Berkshire Hathaway lets specialists run operating companies while Warren Buffett and Charlie Munger stick almost monomaniacally to capital allocation and a narrow circle of competence.