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Random Walk Down Wall Street
Posted on 7/29/09 at 11:50 pm
Posted on 7/29/09 at 11:50 pm
For those on here who have read it and are constantly trying to pick stocks and backing it up through research...
What is your opinion on the thought that by the time any news has been released (no matter the fashion as long as it is not inside information), it has already been incoreporated into the stock price, and the theory that the overall market is so efficient that it cannot be outsmarted?
What is your opinion on the thought that by the time any news has been released (no matter the fashion as long as it is not inside information), it has already been incoreporated into the stock price, and the theory that the overall market is so efficient that it cannot be outsmarted?
Posted on 7/30/09 at 7:59 am to Rush2112
I tend to agree with this statement more than I disagree with it.
Posted on 7/30/09 at 9:02 am to Rush2112
quote:
What is your opinion on the thought that by the time any news has been released (no matter the fashion as long as it is not inside information), it has already been incoreporated into the stock price, and the theory that the overall market is so efficient that it cannot be outsmarted?
I beleive this is one of the basic premises when dealing with stocks as a whole or the overall market in general. The market is still undefeated against anyone who has claimed to have the better of it. It has humbled men over and over again who thought they had it figured out. On msnbc this week you had one analyst saying the DOW was heading down to 4200 and on the same show the other analyst had it going to 11000 by year end. Both were convinced the other was out of their mind. IMO, this illustrates how efficient it is, and why even "experts" really have no clue.
I do think however that individual stocks can and have been invested in successfully. Careful research and due diligence has made nice profits for prudent investors countless times.
Posted on 7/30/09 at 10:32 am to amsterdam
Maybe the only thing amsterdam has ever said that I've agreed with.
Posted on 7/30/09 at 10:40 am to Rush2112
To take it further, how do individual day traders expect to beat the Einstein's who are utilizing high frequency trading algo's and are co-located with or in the exchanges and are seeing competing trade prices before execution? I don't know what happens with the S&P by end-of-year, but do know more than a few people who have lost all their savings trading. It's always a new system or tips they buy from a guru or the charts say something is extremely likely to happen that doesn't,etc. Oh well, good luck to them.
Posted on 7/30/09 at 10:46 am to tirebiter
I don't think the average person has enough knowledge in stocks and should not be investing large amounts of their savings in them.
I think if you do some research and pick well financed well run companies that pay good dividends, you can do fine over the long run.
It does take someone with lots of know how to win at day trading.
I think if you do some research and pick well financed well run companies that pay good dividends, you can do fine over the long run.
It does take someone with lots of know how to win at day trading.
Posted on 7/30/09 at 10:52 am to notiger1997
quote:Thanks for the compliment.
It does take someone with lots of know how to win at day trading.
Posted on 7/30/09 at 10:56 am to LSURussian
I think some people in the end just get lucky with things. I know a few people who work for Exxon who don't know anything about stocks, but they were taught early on to put money into their plans. Dudes are millionaires now after working there for 30 years.
Posted on 7/30/09 at 11:02 am to notiger1997
quote:As the old saying goes, "I'd rather be lucky than smart." I day trade regularly and it's been "berry, berry good to me."
I think some people in the end just get lucky with things.
Posted on 7/30/09 at 11:05 am to tirebiter
quote:
To take it further, how do individual day traders expect to beat the Einstein's who are utilizing high frequency trading algo's and are co-located with or in the exchanges and are seeing competing trade prices before execution? I don't know what happens with the S&P by end-of-year, but do know more than a few people who have lost all their savings trading. It's always a new system or tips they buy from a guru or the charts say something is extremely likely to happen that doesn't,etc. Oh well, good luck to them.
I think the majority of that is snake oil salesman bs. Its like the next wonder diet pill. There is no trick that hasnt been thought of. To be successful in trading stocks the secret is to apply yourself and do the work, just like it takes a good diet and exercise to be in good shape.
Anyone have thoughts on the unpredictible nature of people (from investors to CEO's) and how that impacts the markets swings. I personally beleive this is the one factor that will forever keep the market beyond the reach of any analysis designed to predict its movements.
Posted on 7/30/09 at 11:09 am to LSURussian
Yeah, I hear that often. Then the next day they do something that goes against them in large dollars, then they lose their arse trying to make it back. The comment is in no way targeted at you, just a common theme running through these guys comments. Then there is the one friend that was buying shares of a penny stock company and later lent them money to help get a product to market and the company defaulted on his loan. He used to make ~ $300k-$400k a year trading and is down to about $20k from 7-figures. I have heard it all.
I don't buy securities based on blogs, boards, or pundits, but I am sure many do.
I don't buy securities based on blogs, boards, or pundits, but I am sure many do.
Posted on 7/30/09 at 11:43 am to tirebiter
Today is a perfect example. As I scroll through my news reader, I see VISA posting a huge profit increase, while what seems like every other company (Sony, Nintendo, Siemens, Shell, Goodyear, Apache, Avon, Tyco, IP, WM, Dow, Cisco, to name a few) in the world with any type of relevance is reporting either massive profit drops or outright losses. And markets are up 1.5%.
Posted on 7/30/09 at 12:03 pm to kfizzle85
quote:And Dow is UP over 8% right now!
(.......Dow.... to name a few) in the world with any type of relevance is reporting either massive profit drops or outright losses.
&
Posted on 7/30/09 at 1:24 pm to LSURussian
Sentiment (always anecdotal) feels like it is ridiculously bullish now.
Posted on 7/30/09 at 1:27 pm to kfizzle85
Uhhhhhh, I was referring to Dow Chemical (DOW). They announced second quarter results of a net loss of $435 million this morning and their stock is UP big today.
Posted on 7/30/09 at 1:33 pm to LSURussian
I know, I was just making a general comment, and you were the last post.
Posted on 7/30/09 at 4:25 pm to amsterdam
quote:
On msnbc this week you had one analyst saying the DOW was heading down to 4200
Col Hap was on msnbc?
Posted on 7/30/09 at 7:01 pm to amsterdam
:iagreewiththis:
Plenty of people spend so much time trying to find the Holy Grail. Just like the dude in the movie PI most end up losing their fricking minds! It takes a tremendous amount of discipline and risk management (not aversion) to succeed as an individual investor/trader. The key is to find a system that you are comfortable with and that is proven successful, and stick with it. After years of persistent trial and error one can beat the averages for sure.
Plenty of people spend so much time trying to find the Holy Grail. Just like the dude in the movie PI most end up losing their fricking minds! It takes a tremendous amount of discipline and risk management (not aversion) to succeed as an individual investor/trader. The key is to find a system that you are comfortable with and that is proven successful, and stick with it. After years of persistent trial and error one can beat the averages for sure.
Posted on 7/30/09 at 9:29 pm to Rush2112
quote:
What is your opinion
Ah, thanks for asking!
I think that occasionally there is "free" money to be found in the financial markets but unless you are managing a ton of money it isn't worth the work required to uncover the opportunities. If you are managing a billion dollars, *maybe*. But even then you will probably do about as well with an index and can go play golf instead.
I really don't understand the fascination with financial markets sometimes. There are often very real opportunities in markets that are not actively traded where you can get a real information edge, such as local businesses or real estate.
One can get lucky in the major financial markets, but outsmart it year after year? I'm betting no. The financial markets, with a good diversification strategy, are a good place to store funds that would otherwise be idle.
If you want a shot at "beating the market" your chances are better learning the local investment scene and placing your bets there.
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