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Glad to see this is the top comment. It frustrates me to no end to see people lapping up TA like it is remotely useful when we spent our first semester on finan

by cde-v 3y ago

Glad to see this is the top comment. It frustrates me to no end to see people lapping up TA like it is remotely useful when we spent our first semester on finance at university essentially disproving TA signals. It was literally Finance 102.

deleted 3y ago
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npsomaratna 3y ago
Out of curiosity, what would you consider Finance 101?
- patmorgan23 3y ago
  Time value of money, discount rates, etc
Atlas22 3y ago
If you expected to learn useful finance at a university, you already failed as soon as you applied. If anyone there knew what they were doing financially, they wouldnt be there, and especially not teaching Finance 102. In case you were not aware, nearly all professors hate teaching lower level classes, so they naturally get forced on the worst performing professors (the ones that are closest to getting fired). Concluding that the entirety of TA can not be useful (the Null hypothesis is true for all input signals) just from seeing that a few strawman TA in finance 102 not work is beyond absurd.
- btilly 3y ago
  If some version of TA worked, then as soon as enough traders adopt that version of TA, it would stop working. That is not to say that no versions of TA will work. After all Long Term Capital made a fortune on reversion to the mean...right until they went bankrupt. (And then their portfolio went on to make a fortune again. Too bad they were insolvent.) But it will only continue to work if the trading strategy is not widely known, or comes with trading risks.
- cde-v 3y ago
  The fact that you think a finance degree is centered around trading stocks tells me all I need to know about you and your beliefs. And even on the topic of stocks/derivatives, are they teaching the wrong dividend discount model? Or the wrong black-scholes model? Did they get the equation wrong or something? Or are you just mad because they aren’t teaching TA? And just wondering, using TA, how would you calculate how much to change an M&A offer in order to compensate for including a poison pill?
themodelplumber 3y ago
Does that mean you spent time in university "disproving" e.g. mean regression? Or was it some unrealistically hardcore definition of TA like "any given indicator taken in isolation should lead to profits every time?" Just curious about the details, thanks.

by cde-v 3y ago

deleted 3y ago

[deleted]

npsomaratna 3y ago

Out of curiosity, what would you consider Finance 101?

patmorgan23 3y ago
Time value of money, discount rates, etc

Atlas22 3y ago

If you expected to learn useful finance at a university, you already failed as soon as you applied. If anyone there knew what they were doing financially, they wouldnt be there, and especially not teaching Finance 102. In case you were not aware, nearly all professors hate teaching lower level classes, so they naturally get forced on the worst performing professors (the ones that are closest to getting fired). Concluding that the entirety of TA can not be useful (the Null hypothesis is true for all input signals) just from seeing that a few strawman TA in finance 102 not work is beyond absurd.

btilly 3y ago
If some version of TA worked, then as soon as enough traders adopt that version of TA, it would stop working. That is not to say that no versions of TA will work. After all Long Term Capital made a fortune on reversion to the mean...right until they went bankrupt. (And then their portfolio went on to make a fortune again. Too bad they were insolvent.) But it will only continue to work if the trading strategy is not widely known, or comes with trading risks.
cde-v 3y ago
The fact that you think a finance degree is centered around trading stocks tells me all I need to know about you and your beliefs. And even on the topic of stocks/derivatives, are they teaching the wrong dividend discount model? Or the wrong black-scholes model? Did they get the equation wrong or something? Or are you just mad because they aren’t teaching TA? And just wondering, using TA, how would you calculate how much to change an M&A offer in order to compensate for including a poison pill?

themodelplumber 3y ago

Does that mean you spent time in university "disproving" e.g. mean regression? Or was it some unrealistically hardcore definition of TA like "any given indicator taken in isolation should lead to profits every time?" Just curious about the details, thanks.