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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Ron Dior who wrote (14637)	8/17/1999 4:40:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 29970

In a population of 1000 traders the laws governing trading say about 400 will lose a little, 300 will gain a little, 250 will lose a lot, and 50 will gain a lot in a given period of time called a run. Actually the distribution follows something called a Gaussian distribution which is lepto-kurtotic, negative in mean, with outliers. In the second run the members of each category above shift to other categories, and of the 50 in the big gainer category only about 10 will still be in that category after the second run. After n runs there exists one individual who has been in that category in each run. All the others have been winners and losers randomly in each run, but their average return approaches the negative expected return intrinsic to trading. The outlier in the distribution, the one individual who has been a winner in all runs, interprets the outcome as due to their great skill and ability, but it's only the laws of probability which happened to work in that individual's favor. When you trade you can't expect to be that one. It's betting on 1 in 1000 or worse, something approaching lottery expectation. The new fools say the old guys didn't know how to do it right, but the old guys did better against much greater difficulties like 5% - 10% commissions. This is the great silent truth of the best traders of the 19th and 20th centuries. The greatest all failed. The only way they survived was they learned over time to slowly stop trading until they didn't trade at all. In most cases they went broke. You never hear from them. You only hear a few success stories from gunslingers until they disappear with holes in their shoes. The brokerage houses have extensive data supporting the above although their data is far more condemning. The houses love the fine-tuned expert who is never wrong because they last far longer than others, but in the long run they go broke. The TA types last the least. The houses have developed elaborate strategies to encourage both types. It is just like the techniques practiced at Vegas. You have to be young and uneducated to be sucked into the gambling parlors of the Wall Street casinos. You guys who are stepping in and out of the stream don't know the inefficiency of doing that. It takes years before the laws of mathematics come to bear, but they are relentless and unforgiving. How is it that Wells called the Martians? Vast, cool, and indifferent. That's the probability reality and it is coming in to get you quietly on little cats' feet just like the bear market. Your report will be: How did we get here?