Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 176.49

+1.5%

12:39 PM EST

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To: Uncle Frank who wrote (108912)	11/20/2001 3:26:40 PM
From: Wyätt Gwyön	Read Replies (1) of 152472

A rational person/investor wouldn't be a bear or a bull. The rational approach would be to remain neutral, and attempt to capitalize on imbalances in the market. well, let's keep in mind that mucho occasionally sez things tongue in cheek. the rational approach you describe--agnostic, capitalizing on "imbalances", i.e., basically a trader--relies on the heretofore academically unsubstantiated position that traders can outperform the market. in reality, everyone underperforms the market on average, because the collective returns of market participants equal the market return MINUS trading costs. frequent traders probably underperform more substantially in aggregate due to their higher costs...and it is worth keeping in mind that there is considerable positive survivorship bias to this group as unsuccessful traders can quickly go bankrupt. i believe a distinction can be made between what is "rational" and what "works". rational thinking would be based on fundamental returns. since the market is frequently skewed from this intrinsic value, what works can likewise differ from what is "rational". the only defense for "rational" i believe in is that over long periods of time, the weight of fundamentals overcomes all short term volatility to deliver the returns expected from fundamentals. this gets back to the grantham analogy of throwing handful of feathers from a tall building--you have no idea what their flight path and flight duration will be (unpredictable, short-term volatility = unpredictable short term), but you can be reasonably sure they will eventually land somewhere due to gravity (fundamental, expected return over the long term).

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