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Strategies & Market Trends : Value Investing

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To: Michael Burry who started this subject	7/16/2003 9:42:21 PM
From: Paul Senior	Read Replies (1) of 78670

When some of these mathematicians (who are otherwise well-versed in EMH) start picking stock for themselves... uh oh. Trouble. ... for those who can access WSJ On-line... online.wsj.com Book review: "A Mathematician Plays the Stock Market" excerps from The WSJ: "John Allen Paulos is a mathematician, but he is also human. As a mathematician, he has a pretty good theoretical grasp of the stock market. As a human, he is prone to the same sorts of irrationalities the rest of us are. And so, three years ago, around the peak of the market, he made a series of increasingly foolish moves that culminated in his financial humiliation and his decision to write this interesting book." "...Instead of putting it (money he received) in an index fund -- his investment policy until that point and one he knew to be theoretically sound, if a bit boring -- he decided to buy some shares of WorldCom. The market was booming, and Mr. Paulos was seduced (as which of us hasn't been?)" "As WorldCom's price dropped, he "averaged down" by purchasing cheaper shares." I know that game. Been there myself with WCOM. And now with MIR. Ouch. But at least I'm diversified enough to have some winners too. Paul Senior

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