>> there is no skill, only luck. . . . many investment professionals . . . ignore a large body of statistical evidence<<
MM- Your view is pretty much consistent with the "efficient market theory" that on average, no one can do better or worse than the overall market over the long haul. The trouble with this theory is that the data used to back it up are generally incomplete, with samples taken from only a portion of the market (e.g., mutual fund results). The second problem is the assumption itself that the market is efficient, in that everyone knows all the information available about a particular stock, and that information is contained in the valuation the market places on that stock.
Don't accept my word that this is nonsense. Take it from Warren Buffett, whose whole investment theory is based on the fact that he understands certain things about certain stocks that the rest of us fail to understand. He's done pretty well over the last 30 or so years--far better than the market as a whole. And I would not call his success simply a matter of luck.
As for QUALCOMM, compared with ALL other telecom equipment companies, its management is far superior, and so is the quality of its personnel throughout the company. They get the cream of the crop of engineers, particularly those specializing in digital signal processing, a field in which its founders pioneered. Looking just at personnel quality, one can be confident that over the long haul this company will do better than its competitors (in a reasonably free market, that is). Put another way, the probability that an investment in QUALCOMM will do better than the market as a whole is very high. Today's price of QUALCOMM shares, moreover, is, if anything, a testament to ane INEFFICIENT market theory.
Art |
