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1. The Medallion Fund went insider-only 17+ years ago. The best explanation for their performance - assuming it's legitimate, since the fund itself isn't audite
by zhdc1 4y ago
1. The Medallion Fund went insider-only 17+ years ago. The best explanation for their performance - assuming it's legitimate, since the fund itself isn't audited - is that they use an extreme amount of leverage to multiply "safe" returns. Of course, it's much more likely that the information being leaked to WSJ is a marketing ploy to keep investors in Renaissance's two publicly available funds, both of which greatly underperform the S&P 500
2. BRK is dead even with the S&P 500 over the last decade. This is despite the fact that BRK has access to cheap/nearly free leverage
There are better examples out there if you want to critique EMH.
The original point still stands. The vast, vast majority of professional investors (let alone retail investors) underperform the market. Almost everyone who promises safe alpha is full of it.
- baobabKoodaa 4y ago> There are better examples out there if you want to critique EMH. I'm curious. Can you give some links, please? > The original point still stands. The vast, vast majority of professional investors (let alone retail investors) underperform the market. Almost everyone who promises safe alpha is full of it. EMH claims that nobody can consistently beat the market in terms of risk-adjusted returns. Yes, almost everybody who promises safe alpha is wrong. That's self-evident from the fact that the stock markets are mainly professionals trading against other professionals. If one professional makes money with a good trade, there is (most often) another professional at the other end of that trade. Obviously you can't have a negative-sum game and then have the majority of players making positive returns - it wouldn't be negative-sum in the first place if that were possible!