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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (43361)	7/18/2011 3:38:01 AM
From: badi_	Respond to of 78467

Well you got it wrong, it is not like buying lottery tickets, it is about understanding the structure of uncertainty and see what companies are more likely to make very big growth. This quote is the best answer to your common question: Quote Middlebrow thinkers sometimes make the analogy of such strategy with that of collecting "lottery tickets." It is plain wrong. First, lottery tickets do not have a scalable payoff; there is a known upper limit to what they can deliver. The ludic fallacy applies here—the scalability of real-life payoffs compared to lottery ones makes the payoff unlimited or of unknown limit. Secondly, the lottery tickets have known rules and laboratory-style well-presented possibilities; here we do not know the rules and can benefit from this additional uncertainty, since it cannot hurt you and can only benefit you. end of Quote