countless millions that Niederhoffer had made over the years -- he could not escape the thought that it might all have been the result of sheer, dumb luck. /snip/
...Suppose that there were ten thousand investment managers out there, which is not an outlandish number, and that every year half of them, entirely by chance, made money and half of them, entirely by chance, lost money. And suppose that every year the losers were tossed out, and the game replayed with those who remained. At the end of five years, there would be three hundred and thirteen people who had made money in every one of those years, and after ten years there would be nine people who had made money every single year in a row, all out of pure luck.
Yeah, ancient random-walk argument against money managers, debunked by Buffett in his talk "The Superinvestors of Graham-and-Doddsville" ( tilsonfunds.com ). For some reason, not one, not three, but tens (if not hundreds) of Graham students outperformed market for ages. Yet, we hear this random walk crap again and again. :( Color me sceptical when Spekulatius claims this to be one of the best books about market. :( |
