Chuzz, you are arguing that the market can not be gamed by playing runs, which is consistent with your previous statements (widely accepted) that stock prices follow a random walk, or at best a martingale process. If so, then I agree with your argument, since one is just as likely to begin betting on a downward run (or a rapid switch) as on an upward run. The money made on positive runs would be offset by the losses on equally likely negative runs or rapid switches. At best one would break even over the long run, although commissions would take one negative.
However, in a bull market, and if one picks a good stock (nor difficult in a bull market), the the overall trend would favor positive runs by a considerable margin (a random walk/martingale with a trend), and I suspect that is what makes this gaming strategy successful for Cosmo, though it is not a sure thing. Of course, if the market turns, it would be a losing strategy, but I assume he is astute enough to recognize the turn. If one were brave enough, one could short negative runs in a bear market, I suppose.
BWDIK |
