<<<Who can really beat the market without proper DD???? >>
The simple answer, if asked of me, is that I do not know.>
Brianh, Jay, that's easy. About 45% of investors can beat the market on any particular trade. It would be 50% but for brokerage, and the smarty-pants who are clever and have a very high success rate which is not the result of luck. Unfortunately, those people are indistinguishable from those who are simply inordinately lucky.
For example, based on my QUALCOMM purchases, I am a registered genius. Based on my Globalstar purchases, I am a certifiable moron. Yet, I felt I was very careful with my diligent investigation in minute detail of the two companies and know what I am doing. But add the facts of my investment outcomes together, and for all I know, the fact that I've done okay overall was purely because I was randomly one of the lucky ones in life's casino.
Leaving brokerage aside, and watching 1000 monkeys invest, using conventional monkey techniques, which is a similar process to how they type the works of Shakespeare, we can see that a few of them are registered geniuses, like me, [ignoring my Globalstar investment].
On the first trade, 500 of them are right. They feel pretty good. On the second trade, 250 of them are right again. They snigger at the losers. On the third trade, 125 of them are right again. They buy a new car and give advice to other monkeys at work. On the fourth trade, 62 of them chalk up another victory, buy all new clothes and join a fancy club. On the fifth trade, 31 are right and they are starting to calculate their profits and taxes each day. On the sixth trade, 15 are right and they are doing it on margin [conservatively of course] but they have really got this stuff figured out so buy a Lexus. On the seventh trade, 7 of them are right and they quit work, buy a new house, gear up a little more. On the eighth trade, 3 of them are right, so they start an investment newsletter, take 50% margin, order a Cessna Citation citationx.cessna.com and are hailed as investment gurus. On the ninth trade, 2 of them are right. They are considered superhuman genius heroes of capitalism. On the tenth trade, 1 of them is right and is generally considered by everyone, including themselves, to be a supernatural being.
They might get the next one, two or three trades right too. Or even seven with a following wind. But one day, the fact that they are actually a monkey with no brains will kick in. They will be reduced to what they actually are, which is a no-brainer statistical anomaly, which is included in all large numbers of monkeys/sheeple entering a zero-sum game. They will be VERY surprised that they are not in fact any better than the other monkeys who lined up in the 1000 monkey invesment challenge.
So, it's true that we don't know who will be the lucky monkey, but plenty of them can be and will be. For a while.
Of course there is a major skewing of the randomness, because in fact we are NOT monkeys and we all have a greater or lesser ability to analyze actual value by predicting the future.
Softly, softly, catchy monkey.
Perhaps the luckiest monkey is the one who loses first, keeps their house, job, normal life and doesn't waste time studying stochastic variables, in six dimensional standard deviations, of cup and handle disposed head and shoulder formations with moving MacD averages integrated with third order partial differential analysis of funds flow. The unluckiest one is perhaps the one who orders the Cessna Citation, but has to cancel the order, due to the tax man and bailiffs visiting with bankruptcy proceedings.
Though perhaps, for some, it's better to be a has-been than a never-was and to have enjoyed the thrill of the winning and feelings of genius.
Mqurice
PS:
Happy little moron, sitting in the sun.
Doesn't know he's moron!
My God, perhaps I'm one? |
