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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 175.15+0.3%10:51 AM EST
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To: Maurice Winn who wrote (121954)7/23/2002 5:04:35 PM
From: Clarksterh  Read Replies (1) of 152472
 
Maurice - The reason that indexed investments do better than traded investments is because of the costs of trading

Given that 90% (WAG) of the shares are controlled by 'professionals' it is inevitably true that as a group this is true, but it is not necessarily true for any given subgroup. The efficient market theory is a bunch of hogwash as is easily demonstrable, and it amazes me that anyone still touts it. Some interesting data:

1) Several years ago it was shown that money managers from ivy league schools (i.e. on average smarter and better connected) do better than their non-ivy league compatriots.

2) Very often when an investment advisor changes their rating, and no other materially new news is released to the market, the price changes. In efficient market theory this should not happen.

...

n) The number one argument for efficient markets given by the many academic proponents is that market things (day to day price movements, fund manager performance as a group, ...) are gaussian outside of news announcements. First, many of these things are not gaussian (although they are nearly so). Second, there is absolutely nothing that says something with a gaussian distribution must be unpredictable. (I leave it as an exercise for you to think of some examples.)

BTW - I realize you weren't necessarily touting the efficient market theory, but you said something that mildly grated and heck, I'm bored right this instant. -ggg-

BTW2 - Just because the market isn't efficient doesn't mean that I claim to be able to beat it. And the people who can beat it generally don't (or can't) tell you how they do it.

Clark
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