4 ms·
That doesn't prove a damn thing. When so many people are playing, there's bound to be some that consistently win, just by chance alone. The book discusses this
by drjesusphd 10y ago
That doesn't prove a damn thing.
When so many people are playing, there's bound to be some that consistently win, just by chance alone. The book discusses this.
- trentmb 10y agohttp://dilbert.com/strip/2001-10-25 http://dilbert.com/strip/2001-10-25
- tcoppi 10y agoAnd there are statistics tests one can use to determine if one's performance meets those statistical parameters to be random. Many funds and managers beat it over the long term, such as Warren Buffet, but the vast majority indeed do not.
- refurb 10y agoWarren Buffet usually invests to the extent that he has the power to change how the company is run. He usually uses that power.
- tcoppi 10y agoDoes that change my thesis at all?
- refurb 10y agoI was just drawing the distinction between beating the market through passive investing (simple stock picking) vs. what Warren Buffet does.
- nomailing 10y agoIn addition to that, there might be an effect due to the media hype around investments of Warren Buffet. People see in the news that Buffet invested in companyXYZ so they think that must be a smart idea and also invest in the same company and therefore driving the price higher...
- gnaritas 10y agoOver any one year, sure, even over a few years, sure, but when you see consistent winners over decades in numbers that exceed what random chance would expect, it's foolish to still insist the market is random other that it being a good way to sell books. I know what the book discusses, and the book is an unproven hypothesis, it doesn't need to be disproven as it has never been proven in the first place. That markets are random is a hypothesis only; one lacking sufficient evidence to declare it a theory. No one has proven markets are random and that's where the burden of proof lies.
- drjesusphd 10y agoShow me an example of someone repeatedly beating the market, year after year, for decades. Besides, even that is "only" a one in a million chance. How many people trade on the stock market?