How Stephen Wu's Carthage Capital Thrives Without Predicting the Market

The stock market isn't something you can easily pin down. Just when it starts to feel predictable, everything changes. So far, 2025 has been one of those years. Between shaky economic indicators, overhyped AI headlines, and mixed signals from the Fed, it's been hard for investors to find their footing. Some strategies that worked last year have already been shaken loose. Others never got off the ground. In this kind of environment, the usual playbook doesn't cut it.

Stephen Wu has taken a different route. Before launching a hedge fund, he spent years working in artificial intelligence. At Amazon and Microsoft, he built machine learning models and worked with massive datasets. Trading wasn't the plan at the time. But the skills he picked up—thinking in probabilities, recognizing patterns, stripping emotion out of the process—would eventually lay the foundation for something new.

He started trading options quietly. Just testing ideas, watching market behavior, and applying logic instead of gut instinct. Over time, that testing turned into a system. A real strategy. Instead of betting on which way a stock would move, he focused on where it probably wouldn't go. It's a different way of looking at risk. By selling options, he set up trades that could win as long as things stayed within a certain range. No need to chase breakouts or time reversals.

That approach, shaped over years of iteration, became the core of what Wu now runs at Carthage Capital. He officially launched the fund in 2023 and put his own money behind it. Since then, it's returned more than 30 percent annually—even through the rocky stretches. He's not promising to beat the market every time, and that's kind of the point. He's aiming for consistency. And in markets like this, consistency matters.

April of this year didn't pull any punches. The S&P 500 dropped hard in a single session. Volatility spiked. Several hedge funds were forced to shut down. For most investors, it was a rough wake-up call. But Wu wasn't scrambling. He'd already started pulling back risk before the worst of it hit.

In a note to investors, he explained what he saw coming. The signs weren't dramatic at first, but they added up. Valuations across the board were stretched. The big AI names hadn't delivered the earnings people were hoping for. At the same time, expectations of rate cuts started to shift. Confidence cracked. Once the market lost its footing, it fell fast.

Wu's strategy wasn't based on trying to predict these moves. That's kind of the whole point. It's built to perform whether the market is going up, down, or sideways. By focusing on probability and keeping trades within a carefully defined range, the fund doesn't need to be right about direction. It just needs to manage the odds well.

That's not to say it's easy. This kind of trading requires constant attention, strong systems, and a deep understanding of risk. Wu has built all of that into the Carthage process. He also brought in people he trusts—colleagues from hedge funds and tech firms who understand how to use data without overcomplicating things.

Not everyone has the time or interest to trade this way. Wu knows that. For many investors, sticking with index funds or long-term holdings makes the most sense. But for those who are more hands-on, and want a way to stay active without chasing trends, this method offers something different.

Carthage Capital has now grown to over 20 million dollars in assets. More investors are paying attention, not just because of the results, but because of how they're being achieved. In a market that feels more unpredictable every month, that steady, grounded approach is starting to look more appealing.For any comments or questions, please contact Carthage Capital at info@carthagecap.com.

Image Credit: Stephen Wu

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