And we both know surprising riches are rewarded if we can just study correctly.
That's a pretty big "if."
The lottery is the best investment of all, if one can just figure out the winning numbers ahead of time. Again a pretty big "if."
No predictive mechanism, system, or person has ever shown efficacy greater than zero. Most have shown negative efficacy; especially after transaction costs and tax costs, you are worse off listening to them. Add on the value of your time, and well, the expected returns become clearly negative.
If you indeed can study correctly -- that is, predict the market -- then great. In fact, if this is the case, then I will dump my NTAP right now, and invest in you, or whatever investment fund you decide to establish.
No one, however, has shown the ability to predict the market. It's a crapshoot, and it's generally not worth it. I have traded short-term sometimes (in fact, I spent about an hour "daytrading" a few hundred shares of NTAP yesterday), and have consistently found that it's not much of a moneymaking proposition, if at all.
Unless you have an informational advantage (this is why the investment houses find trading profitable), or can move markets out of your own accord (again, the investment houses), trading is not profitable. The only type of profitable trading, absent informational or price-setting advantages, is position-neutral trading, where you provide liquidity and take spreads (what market makers do).
Have you ever heard of a billionaire who trades? Or, at least as unlikely, have you ever heard of anyone who got really rich (I mean really rich, not a few hundred K)through trading? Don't you think that if daytrading were profitable, these people would be doing it? Meanwhile, there are many who have gotten rich through investing -- and billionaires either LTBH or let the investment houses trade for them in the information-privileged environment.
FWIW, though, one thing I always appreciate about traders is that traders usually don't go around saying that everyone should be a trader, the way that LTBH'ers say everyone should become one. (It's a bit like what Umberto Eco says about the difference between Protestants and Catholics... anyway...) Your statement, however, teeters dangerously on that line, implying that one needs to trade to get "every last dime" out of NTAP.
Just some early morning ruminations.... |
