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If an acquirer would pay $23B and the market values it at $23B then you don't make any money. Meanwhile you take the risk of holding a high flying stock. Maybe
by cheriot 13y ago
If an acquirer would pay $23B and the market values it at $23B then you don't make any money. Meanwhile you take the risk of holding a high flying stock. Maybe you're right, but it's a gamble.
- erikpukinskis 13y agoYou just described every stock on the market. If it's not a gamble then people buy it and the price goes up until it's a gamble.
- cheriot 13y agoYou're arguing for strong market efficiency. There's nothing wrong with index funds, but that doesn't explain why Graham, Dodd, Buffet, and similar investors have out performed market indexes for so long.
- erikpukinskis 13y agoA stopped clock is right twice a day. If you compare random subsets of index funds (i.e. take a random half of the stocks in the fund and call those a new fund), some of those will consistently outperform the indexes too.