3 ms·
Isn't this basically the Texas Sharpshooter Fallacy? There are how many thousands of hedge funds? Of course some of them will beat the market. (And some will no
by eli 9y ago
Isn't this basically the Texas Sharpshooter Fallacy? There are how many thousands of hedge funds? Of course some of them will beat the market. (And some will not beat the market, and all of them will charge fees far greater than an index fund.)
If most of them don't beat an index fund and there's no way to tell winning funds from losing funds in advance, then the smart money is to never invest in a hedge fund.
- dsacco 9y agoNo, it’s not the Texas Sharpshooter Fallacy. See my response to the other commenter in this thread forwarding (essentially) the same argument. You cannot claim that some event is reducible to chance just because it’s in a small minority of successes out of many more failures. There are stat arb funds which have beaten the market for decades consistently. HFT firms make millions of trades per day with a consistently positive win rate. No matter what you define as a trading event, the probablity analysis is not going to hold up.