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I have thrown a dozen or so darts, and my rate seems to be around 80%. But then, I'm not just throwing darts; I'm reading that companies are going to do better

I have thrown a dozen or so darts, and my rate seems to be around 80%. But then, I'm not just throwing darts; I'm reading that companies are going to do better in the future and will see a rise in stock price, and it makes sense, so I sometimes buy them. Maybe I'm just the lucky one. I started with ARM a good eight years ago, when I read that they were going to do really well by supplying Apple. Of course, if I'd done the same thing with Imagination technologies 8 years ago, it would have been a less happy ending; I can only assume that the news I read at the time was more effusive about ARM. Most recently (13 months ago - this isn't a regular thing), a British pasty retail outfit named Greggs. The news said things were looking good, I could see their stores were busy, I bought some shares, they're up about 40% in 13 months (which is unusually good, I freely admit, and I certainly didn't expect that). That's really all I do, and it seems to work out (and it really is rare when I do; typically, I just dump all my pennies into index funds - easily 80% of my pennies are in index funds). I think some of the big name successful investors do something similar, but obviously on a much grander and more informed scale. Plus the British house-builders. Every time the UK government announces another plan to help young people get fifty year mortgages, it's time to buy some more of them! They will crash eventually, I'm sure :(

jogjayr 9y ago
> I'm reading that companies are going to do better in the future and will see a rise in stock price, and it makes sense, so I sometimes buy them. I think that way about my index funds too. But then it's impossible to know the reason for the price rise. Maybe it's because of millions of other guys like me who read the same articles, came to the same conclusion as me, and put their money in too.
- EliRivers 9y ago
  Either way, those rises don't seem to be "priced in" in any way that means they won't actually go up. Maybe it'll all turn around soon.
lisper 9y ago
> I have thrown a dozen or so darts, and my rate seems to be around 80%. The odds of that happening by chance are <50% but still quite high, about 6-7% depending on exactly how you reckon it. So one person in 15 will get this result purely by chance. There are studies that show that very few (like <<1%) professional money managers can beat the market consistently. You may well be one of those rare people, in which case you could make billions on Wall Street. But until you amass a much longer track record than you have, the odds are much higher that you are just one of the lucky ones. There are a lot more lucky people out there than most people realize.
- Simon_says 9y ago
  Yea, all that's true, but Eli has a significantly easier job. A professional manager has to make a lot of decisions and still has to invest money even if they don't have any insightful ideas. On the other hand Eli will only invest if he gets a good idea, and if not, then no investment.
  - lisper 9y ago
    That's no excuse. Eli can always park his undeployed capital in an index fund. So if he can consistently pick winners 80% of the time he'll still beat the market even if he has fallow periods.
    - Simon_says 9y ago
      Excuse for what? Of course Eli can do that, and it has nothing to do with my point.
      - lisper 9y ago
        Excuse for not taking his (alleged) talent to Wall Street and making billions of dollars. > it has nothing to do with my point which was: > A professional manager has to make a lot of decisions and still has to invest money even if they don't have any insightful ideas. Implying that Eli's talents could not be deployed on Wall Street because he could not operate under the constraints on which professional money managers have to operate. But that's not true.

jogjayr 9y ago

> I'm reading that companies are going to do better in the future and will see a rise in stock price, and it makes sense, so I sometimes buy them. I think that way about my index funds too. But then it's impossible to know the reason for the price rise. Maybe it's because of millions of other guys like me who read the same articles, came to the same conclusion as me, and put their money in too.

EliRivers 9y ago
Either way, those rises don't seem to be "priced in" in any way that means they won't actually go up. Maybe it'll all turn around soon.

lisper 9y ago

> I have thrown a dozen or so darts, and my rate seems to be around 80%. The odds of that happening by chance are <50% but still quite high, about 6-7% depending on exactly how you reckon it. So one person in 15 will get this result purely by chance. There are studies that show that very few (like <<1%) professional money managers can beat the market consistently. You may well be one of those rare people, in which case you could make billions on Wall Street. But until you amass a much longer track record than you have, the odds are much higher that you are just one of the lucky ones. There are a lot more lucky people out there than most people realize.

Simon_says 9y ago
Yea, all that's true, but Eli has a significantly easier job. A professional manager has to make a lot of decisions and still has to invest money even if they don't have any insightful ideas. On the other hand Eli will only invest if he gets a good idea, and if not, then no investment.
- lisper 9y ago
  That's no excuse. Eli can always park his undeployed capital in an index fund. So if he can consistently pick winners 80% of the time he'll still beat the market even if he has fallow periods.
  - Simon_says 9y ago
    Excuse for what? Of course Eli can do that, and it has nothing to do with my point.
    - lisper 9y ago
      Excuse for not taking his (alleged) talent to Wall Street and making billions of dollars. > it has nothing to do with my point which was: > A professional manager has to make a lot of decisions and still has to invest money even if they don't have any insightful ideas. Implying that Eli's talents could not be deployed on Wall Street because he could not operate under the constraints on which professional money managers have to operate. But that's not true.