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larocag

larocag
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  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    Interesting that it would be exploitable but not exploited. If it is exploitable the most reactive investor would exploit it. Once it is exploited, it would go away. They would simple see how much momentum was there and buy at the current price and at a range of prices on the side of the momentum knowing that they would make money. Of course is is all based on confidence in the existence and magnitude of the momentum. As soon as someone was confident it was there they would take it away.

    Exploitable momentum might be there for the most reactive and knowledgeable investor but no one else. Everyone else (that believes in momentum) would just be buying after it was too late--adding to the momentum but getting burned.

    I don't believe in the EMH for the very smartest investors but do for everyone else. You are not talking to the very smartest investors.
    Apr 29 01:42 PM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    So is momentum there or not? If you can detect its existence then the market is not efficient. If you can't detect it then what makes you think it exists?
    Apr 29 12:39 PM | Likes Like |Link to Comment
  • Fed's Inflation Target Misguided? Good Vs. Bad Disinflation [View article]
    I think all of the players in the NFL are wimps and I could do a lot better job at pretty much any position and make a whole lot of money but the elites in charge give the positions to their friends.
    Apr 29 12:36 PM | 1 Like Like |Link to Comment
  • Fed's Inflation Target Misguided? Good Vs. Bad Disinflation [View article]
    I have seen academic drones and I have seen the general population. I'll put my money on the academic drones.
    Apr 28 06:26 PM | 2 Likes Like |Link to Comment
  • Fed's Inflation Target Misguided? Good Vs. Bad Disinflation [View article]
    All of those good things that you point out happened under the Feds current policies yet you complain. Maybe the Fed knows what it is doing and the general population just likes to complain.
    Apr 28 06:16 PM | 2 Likes Like |Link to Comment
  • Defensive Income Strategies For Rising Rates And Bond Outflow Rotation [View article]
    I took the comment to mean that the Fed has yet to raise rates and therefore TLT hasn't been crashing as predicted. I think the comment is early not late.
    Apr 28 06:04 PM | Likes Like |Link to Comment
  • The Crash No One Is Talking About [View article]
    I'm going to pile on. This is a pretty small correction to IWM and the last time it happened (near the beginning of the plot Oct-2011), IWM promptly started going on a tear.

    Congratulations on getting a awards but I consider Technical Analysis to have little merit, which I would characterize as drawing lines and curves on a plot to predict the future without much consideration of the material facts that may have driven the behavior.
    Apr 28 02:26 AM | 4 Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 3 [View article]
    EMH is basically saying that investors as a group are very smart at setting the price of an asset or an index of assets. If anyone is going to beat the index it is going to be the very most informed and wired-in investor (as is I have an HFT bot doing my bidding). If you are not that person they are the one that is going to exploit the inefficiency. If you work for an endowment , pension fund or Wall Street bank, I might be wrong about how good you are.

    As far as me not knowing your performance, unless you have been investing for a few lifetimes you don't know your performance either. Even if the market is efficient, many random monkeys will beat the indexes for quite a while.

    Feel free to inflict alphabetic chaos on anyone you like. As far as I know, I did make that up.
    Apr 27 12:36 PM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    All you need to do is to look at the name. WSD is already advertising that they is smarter than everyone else. WSD knows how trading works and they are here to tell us about it. If you are going to be the smartest person in the room, everyone else needs to be stupid. QED academics are stupid.
    Apr 27 12:22 PM | 1 Like Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    If you consider that being a skilled investor may put you in a position where you invest a lot of money and that being more right than someone else makes them wrong, yes 1% does pass the smell test.
    Apr 26 04:46 PM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    Perhaps reading comprehension problems.
    Apr 26 04:20 PM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    I've never met an adherent of the Stupid World Hypothesis that wasn't exhibit A.
    Apr 26 03:51 PM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    If you think about an inefficient market as one that sets the price of a asset at value other than its "true" value. First you have to have a little philosophical foray into what is the "true" value. For a stock it would be based on how much that company is going to make over some holding period. Nobody knows how much the company is going to earn in the future, not even the insiders so "true" would be a "best guess". Who can best guess? Most often it would be the insiders but they could get caught-up in expectations and such. Insiders can only influence the price so much and aren't supposed to talk about material things. Someone can best guess but the price will be set by the person right in the middle of all the buyers and sellers.

    Every share bought between the best guesser and the middle trader are bought at the wrong price. The amount of money that all of those shares are worth is the amount of money the the irrational people spent to move the price from the efficient price. If the best guesser has a lot of money you might expect that guesser to exploit the irrational people and buy or sell at the irrational price--which would tend to bring the price back to the efficient value.

    Of course really rich people can get wild hairs and a whole bunch of not so rich people routinely get into some interesting group thinks often because they are fed free speech and the irrational can overwhelm the rational. But I think that mostly happens around the edges because while most investors are not so rational about prices, the big money is. That is why they have the big money and they are going to get more of it.
    Apr 25 07:08 PM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 3 [View article]
    While I have the keyboard here and focus is where it is, I'll wack out one more thing. EMH and active versus passive (index) investing are two different things. Yes, if you believe EMH you are apt to be passive. I believe (91.2%) in EMH but invest actively. I just don't convince myself that I am smarter than the truly smart. I just buy what I think fits my needs when I buy. I hope I get a good price (ie am close to the smart people in evaluating).
    Apr 25 01:11 AM | Likes Like |Link to Comment
  • The Efficient Market Hypothesis, Fact Or Fiction? Part 3 [View article]
    And if you think that individual investment is different from an and endowment or pension fund then tell me why. I forgot to bring that up in the first response. Figured it was worth a PS.
    Apr 25 12:12 AM | 1 Like Like |Link to Comment
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