Clark, good points on efficient markets. I automatically deny the idea that brains are useless in trying to figure stuff out and do better than not thinking. That's the fundamental premise of efficent market theory and that it's best not to try to beat the market.
I suspect that the ones beating the markets these days are mostly the PhD mathematicians, with computer assistance, who can model markets and competing PhD mathematicians with their ideas on what models to run in their even faster computers. Plus, the lucky wet chemistry thinkers who have some good understanding of individual company prospects over the long run.
The costs of trading are large though, so that's quite a barrier to overcome, even before entering the battle for investing supremacy.
Mqurice
PS: I've beaten the markets for a long time now, by a combination of luck and understanding. Here's how I do it. I come up with an idea, such as coding and decoding phragmented photons with Fourier Transforms in fast processors, then hope to find somebody who can actually do it. Then, see if they seem to be able to do all the other stuff, such as run a business, hiring, firing and all that stuff. Then, give them my money. Then cross my fingers and keep a close eye on proceedings. Or, notice something that looks good, check it out for any obvious rust, leaking head gasket, dodgy crew or use of sextants instead of gpsOne, buy it, cross my fingers and hope, while getting ready to abandon ship if high seas threaten [keeping a personal lifeboat handy, just in case].
You are welcome to copy my system. |
