4 ms·

>Anyone investing in equities is just in it for the ride, as it is impossible to predict what will happen So people like Jim Simons are merely the luckiest peo

>Anyone investing in equities is just in it for the ride, as it is impossible to predict what will happen So people like Jim Simons are merely the luckiest people alive? The average person earns the average market return, less fees; that's a tautology. Unless you have some reason to believe you aren't average, most people are better off following your advice. It's what I do, personally. But the idea that no one is winning at this game flies in the face of a lot of evidence.

ryandrake 6y ago
There's always someone out of approx. 1 million who will flip a coin heads 20 times in a row. The guy who does is always the poster boy for active management. You can (of course only after the fact) interview him, ask him how he thinks he became such a good coin flipper, and read investment books about him, or just passively invest and accept market returns.
throw0101a 6y ago
> So people like Jim Simons are merely the luckiest people alive? No one reasonable, not even Fama and French who came up with the Efficient Market Hypothesis, claim that the market is 100% efficient. And given that no one knows anything about Jim Simon's Medallion Fund, we actually have no idea how successful they are. But given the quantities and/or trading volumes possibly involved, they don't have to be right very often. In a perfectly efficient market, it's 50/50 whether you'll get the better end of the deal. Now think of a casino: for many games the house's edge is only 1.5% (e.g. blackjack, baccarat, three-card poker). * https://www.gambling.com/ca/online-casinos/strategy/10-casino-games-with-the-lowest-house-edge-18600 https://www.gambling.com/ca/online-casinos/strategy/10-casin... * https://wizardofodds.com/gambling/house-edge/ https://wizardofodds.com/gambling/house-edge/ But that's still enough for a casino to make make money. It may be the Simons et co have just an edge of a few percent points, but they make up their profit on volume. > But the idea that no one is winning at this game flies in the face of a lot of evidence. There are plenty of people that are winning. It's just the people that win one year rarely win a few years in a row (never mind 10+): * https://www.tma-invest.com/spiva-data-reveals-15-years-of-active-underperformance/ https://www.tma-invest.com/spiva-data-reveals-15-years-of-ac... * https://dividendstrategy.ca/what-is-spiva/ https://dividendstrategy.ca/what-is-spiva/

ryandrake 6y ago

There's always someone out of approx. 1 million who will flip a coin heads 20 times in a row. The guy who does is always the poster boy for active management. You can (of course only after the fact) interview him, ask him how he thinks he became such a good coin flipper, and read investment books about him, or just passively invest and accept market returns.

throw0101a 6y ago

> So people like Jim Simons are merely the luckiest people alive? No one reasonable, not even Fama and French who came up with the Efficient Market Hypothesis, claim that the market is 100% efficient. And given that no one knows anything about Jim Simon's Medallion Fund, we actually have no idea how successful they are. But given the quantities and/or trading volumes possibly involved, they don't have to be right very often. In a perfectly efficient market, it's 50/50 whether you'll get the better end of the deal. Now think of a casino: for many games the house's edge is only 1.5% (e.g. blackjack, baccarat, three-card poker). * https://www.gambling.com/ca/online-casinos/strategy/10-casino-games-with-the-lowest-house-edge-18600 https://www.gambling.com/ca/online-casinos/strategy/10-casin... * https://wizardofodds.com/gambling/house-edge/ https://wizardofodds.com/gambling/house-edge/ But that's still enough for a casino to make make money. It may be the Simons et co have just an edge of a few percent points, but they make up their profit on volume. > But the idea that no one is winning at this game flies in the face of a lot of evidence. There are plenty of people that are winning. It's just the people that win one year rarely win a few years in a row (never mind 10+): * https://www.tma-invest.com/spiva-data-reveals-15-years-of-active-underperformance/ https://www.tma-invest.com/spiva-data-reveals-15-years-of-ac... * https://dividendstrategy.ca/what-is-spiva/ https://dividendstrategy.ca/what-is-spiva/