|
By:
Yeah, I like A Random Walk Down Wall Street, but I think a great theoretician should go to great lenghts to try and falsify his own theories, which Malkiel doesn't do at all.
Just a snippet about George Soros from this book, who's achievements are marginalised by the author: George Soros, a famous hedge-fund manager, supposedly endowed with a "Midas touch," made hundreds of millions when he correctly "bet" that some currencies would be stronger than others and translated his bet into hedged-futures contracts. The Midas touch turned to a minus touch, however, when he lost more than half a billion dollars during 1994 on a single currency deal. As if to imply that he just got lucky. No mention is made of Paul Tudor Jones or Steve Cohen or Ed Thorp (other than a note that he found a way to win at blackjack). I think Efficient Market Theory is deeply flawed and only useful for the reason that 'it might as well be true' for most people. When people model reality and then say that that model is reality, smart people start to do stupid things. The greatest fund managers tend to be closed to new investment, or they have grown to the point where returns no longer massively outperform the market. It goes a long way in explaining why the top US universities (Harvard, Yale) investment funds have been able to beat the market: due to their prestige they will be accepted as clients by virtually any money manager that is otherwise closed to outside investment. |
|
By:
the way I see it, they're all playing against each other - so really it's a zero sum game masked by growth in the real economy.
are there some people who'll consistently win in that game? yeah, I can go for that. but can you confidently pick the ones who'll continue to consistently win from the ones that chance has just happened to put above the average for a sustained period? not so sure about that, for various reasons. but in any case, seeing as a lot of the seemingly most successful traders basically thrive off the stupidity of the herd, that's not an argument for the expertise of the community as a whole in valuing new issues, imo. which is where this debate started. |
|
By:
The average fund mgr is someone to avoid at all costs.
IMVHO they should be killed. |
|
By:
What percentage of "the market" is held by managed funds + tracker funds? If it was anything close to 100%, expecting managed funds to outperform the market on average would be futile.
|