4 ms·
Shouldn't any well known strategy stop working over time as more people use it? There's only a finite amount of alpha.
by klipt 6y ago
Shouldn't any well known strategy stop working over time as more people use it? There's only a finite amount of alpha.
- im3w1l 6y agoI've heard people say that the higher returns are compensation for the higher risk.
- skohan 6y agoTheoretically if the risk is actually higher, there should also be a more substantial downside at some point.
- lotsofpulp 6y agoBut practically, you can socialize the risk by devaluing the currency.
- im3w1l 6y agoNevermind, I thought it was talking about penny stocks. Should have read more carefully.
- deleted 6y ago[deleted]
- david-gpu 6y agoRight, but that's not what's happening. Value spreads, the difference in price between the most expensive stocks and the cheapest stocks, are at all-time highs. So the opposite is true: very few people are value investors these days. Possibly in part because value has under-performed over the last 10-15 years. Will the trend reverse? Who knows.