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Is it possible to consistently beat the market?

Anything related to investing, including crypto

fastlanedoll

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Stargazer

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Looking at the Berkshire Hathaway chart, from 2000 onwards it looks like they average 0 over the S&P if you tot up the rough plus and minus %

Maybe because information is ubiquitous now.

Doesn't really answer your question does it? :smile2:

Dan

PS: I don't think investing in S&P or FTSE 100 Trackers are scams as by default weaker companies drop out and growing companies move up hence over time the FTSE always grows. But that should not be where 100% of your money goes and you should not think it is some magic wand. It is what it is.
 

Silverfox148

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Inspired by the Kevin O'Leary invest $100 thread.

This article proposes you can by the following tactics:

What do you think?

Is 'you can't beat the market' & 'just invest in S&P 500 another scam?
No it's a rigged game, you can short term it/get lucky.

Look at Crypto assets, or better yet invest/create your own business. I can turn $10 dollars at Goodwill into $50, look for that type of multiple which is under your own control.
 
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Kid

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Skip Warren Buffet, he isn't stock picker.

But the thing with Medallion fun(d) is real.
One of thing i know they do is correlations.
They find out what is correlated to what and act accordingly.
And they look far and wide:
for example they were checking if local temperature
is correlated with stock market performance.
(It isn't, at least in French stock market)

Mind one thing - those guys perfect their algorithms for past 50
or so years.
 

Ninjafaceplant

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Look into macro-economics, there are a lot of good people out there consistently giving solid info, and showing their sources so you can do your own diligence.

The topic itself will give you an appreciation of the mechanics at work on your own wealth and a good overview of the kinds of actions within the broader economy that will make either basket stocks[s&p], or individual industries/stocks move, then you can look for signs of those actions starting to form.

If you want more info PM me and I'll send you some good starting names.
 

Ing

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You could ride the wave of reddit and co: when stocks are hyped there for 2 or 3 days, you can be sure they will fall soon.
BUT I can t buy shorts on them. But I would beat the market that way!
 
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socaldude

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I think the finance term you are looking for is called “alpha”.

Alpha
 
G

Guest-5ty5s4

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Yes, because the "Efficient Market Hypothesis" is wrong. It's incredibly idealistic and unrealistic. We all know there is information that only a few people are privy to... It's not all out in the open for everyone.

So the market can be beaten, but can you do it consistently? And for how long? Most people can't. And a lot of times even the best rationale for an investment doesn't yield the result you expect because other investors are so irrational (see above about the "Efficient Market Hypothesis").

There's a great INSIDERS's thread about using options to beat the market, too. Leverage is a whole topic in itself.
 

socaldude

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Yes, because the "Efficient Market Hypothesis" is wrong

I have always found that theory to be very irritating. And surprise it comes from academia. Too many assumptions. Every investor has to be rational and an almost epistemological genius for that to even be close to being true. The truth is people are far from rational and fall prey to emotions and stupidity.
 
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G

Guest-5ty5s4

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I have always found that theory to be very irritating. And surprise it comes from academia. Too many assumptions. Every investor has to be rational and an almost epistemological genius for that to even be close to being true. The truth is people are far from rational and fall prey to emotions and stupidity.
Exactly! Not to mention confidential information, INSIDERS, so much that isn’t public.

Anyone who believes the market is totally, perfectly efficient is terribly naive. As MJ would say “I have a bridge to sell (them)”
 

socaldude

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Exactly! Not to mention confidential information, INSIDERS, so much that isn’t public

It’s really no different than saying nobody should waste their time trying be an entrepreneur because all economic markets are efficient.

It’s a stupid theory that generalizes everyone’s possibilities.
 

Spino

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Inspired by the Kevin O'Leary invest $100 thread.

This article proposes you can by the following tactics:

What do you think?

Is 'you can't beat the market' & 'just invest in S&P 500 another scam?

SHORT ANSWER
Yes, it is possible, it requires a lot of work, discipline, study, time
However, don't expect returns of 10-20% a week or even month, good realistic returns are around 10-20% year if you are really good, and keep in mind that you need to consider the drowdawns, so some year you might not even be profitable.
You want higher returns? You need to increase the risk too...

LONG ANSWER
I don't even get started, there is a reason why there is a wide variety of literature about trading psychology, trading systems, technical analysis, fundamental analysis, investing and so on
 
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Rabby

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Beating the market makes it sound like a race. The market, any market, will pay you to give it what it wants.

After all the complicated analysis in equities and futures, it comes down to people who want their position to go up, or not to go down. Just give them what they want.

Buy a put option so they can sell one. Buy a call so they can rent their stocks out. Sell a covered call so you can rent yours out, and sell it at a profit, and maybe they can make a little profit over that.

Market actors have all sorts of needs... certainty, short term gains, long term gains, hedges. They aren't perfectly efficient or perfect econs, but they communicate obvious needs. Learn to provide what they need... you won't 'beat' them in the gladiatorial sense, you'll just make a lot of money working with them.
 

e_fastlane

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Yes, because the "Efficient Market Hypothesis" is wrong. It's incredibly idealistic and unrealistic. We all know there is information that only a few people are privy to... It's not all out in the open for everyone.

So the market can be beaten, but can you do it consistently? And for how long? Most people can't. And a lot of times even the best rationale for an investment doesn't yield the result you expect because other investors are so irrational (see above about the "Efficient Market Hypothesis").

There's a great INSIDERS's thread about using options to beat the market, too. Leverage is a whole topic in itself.
I'm not sure what makes you think that the Efficient Market Hypothesis needs to be either 100% accurate at all times or it's wrong. What evidence do you have that it is not overall right? Everyone doesn't need to know everything for it to be mostly right and work out. Especially when institutional players make up such a large portion of trading.

Statistically you are wrong.

People like Warren Buffet aren't rich because they beat the market, they are rich because they ran businesses.

Wall street employs thousands of the smartest people just to get some kind of edge. I'm not talking about just business graduates. Physicists, statisticians, etc.. you name it. They are all looking for exactly the insight and overlooked information that you are talking about. Statistics show that for all their effort, only a small percent of them can beat the market and an even smaller have done it consistently. But when you take into account chance, a small percent beating the market is exactly what is expected even when it's 50/50 luck.

But you think a few hours on yahoo finance or reading the newspaper gonna get you some insight they don't have? OR is it your extraordinary hard work that will get you there? (a little bit of sarcasm here)

I apologize if it comes off as abrasive, but it seems like your reply is way too overly confident. People need to be careful listening to people just because they are doing well in a certain market. Everyone is a genius/prophet during the longest bull markets, including the show shiner boy that gives stock tips. Good times reward high risk high reward bets. But eventually the bill comes due.

Peter Lynch had about a 30% annual return for the 13 years he ran the Magellan Fund, he quit to spend time with his family.

His genius wasn't in beating the market. It was correctly timing the market.

Show me someone that substantially beats the market over a very long term.
 
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Last edited:
G

Guest-5ty5s4

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I'm not sure what makes you think that the Efficient Market Hypothesis needs to be either 100% accurate at all times or it's wrong. What evidence do you have that it is not overall right? Everyone doesn't need to know everything for it to be mostly right and work out. Especially when institutional players make up such a large portion of trading.

Statistically you are wrong.

People like Warren Buffet aren't rich because they beat the market, they are rich because they ran businesses.

Wall street employs thousands of the smartest people just to get some kind of edge. I'm not talking about just business graduates. Physicists, statisticians, etc.. you name it. They are all looking for exactly the insight and overlooked information that you are talking about. Statistics show that for all their effort, only a small percent of them can beat the market and an even smaller have done it consistently. But when you take into account chance, a small percent beating the market is exactly what is expected even when it's 50/50 luck.

But you think a few hours on yahoo finance or reading the newspaper gonna get you some insight they don't have? OR is it your extraordinary hard work that will get you there? (a little bit of sarcasm here)

I apologize if it comes off as abrasive, but it seems like your reply is way too overly confident. People need to be careful listening to people just because they are doing well in a certain market. Everyone is a genius/prophet during the longest bull markets, including the show shiner boy that gives stock tips. Good times reward high risk high reward bets. But eventually the bill comes due.


His genius wasn't in beating the market. It was correctly timing the market.

Show me someone that substantially beats the market over a very long term.
I’ve been beating the market consistently using options for awhile now. It is possible. If the only return possible in life was a dumb index fund 8-10% per year, nobody in the world would be rich. Your own business can compound much faster than that - try thousands of percents.

I never said anything to disagree with what you said about Buffett. I agree completely.

He got rich as a businessman, not a retail investor, obviously.

Not sure why you’re all riled up at me over this comment since it sounds like we have (sort of) the same thinking.
 

e_fastlane

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I’ve been beating the market consistently using options for awhile now. It is possible. If the only return possible in life was a dumb index fund 8-10% per year, nobody in the world would be rich. Your own business can compound much faster than that - try thousands of percents.

I never said anything to disagree with what you said about Buffett. I agree completely.

He got rich as a businessman, not a retail investor, obviously.

Not sure why you’re all riled up at me over this comment since it sounds like we have (sort of) the same thinking.
Sorry, I was reading alot of threads and maybe your post was just what broke the camels back and my response went overboard!
 

loop101

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I'm not sure what makes you think that the Efficient Market Hypothesis needs to be either 100% accurate at all times or it's wrong. What evidence do you have that it is not overall right? Everyone doesn't need to know everything for it to be mostly right and work out. Especially when institutional players make up such a large portion of trading.

Statistically you are wrong.

People like Warren Buffet aren't rich because they beat the market, they are rich because they ran businesses.

Wall street employs thousands of the smartest people just to get some kind of edge. I'm not talking about just business graduates. Physicists, statisticians, etc.. you name it. They are all looking for exactly the insight and overlooked information that you are talking about. Statistics show that for all their effort, only a small percent of them can beat the market and an even smaller have done it consistently. But when you take into account chance, a small percent beating the market is exactly what is expected even when it's 50/50 luck.

But you think a few hours on yahoo finance or reading the newspaper gonna get you some insight they don't have? OR is it your extraordinary hard work that will get you there? (a little bit of sarcasm here)

I apologize if it comes off as abrasive, but it seems like your reply is way too overly confident. People need to be careful listening to people just because they are doing well in a certain market. Everyone is a genius/prophet during the longest bull markets, including the show shiner boy that gives stock tips. Good times reward high risk high reward bets. But eventually the bill comes due.


His genius wasn't in beating the market. It was correctly timing the market.

Show me someone that substantially beats the market over a very long term.

If +30% annually doesn't qualify as "substantially beats the market", and 13 years of trading doesn't qualify as "a very long term", then you will have to define those terms. He traded from 1977 to 1990, a time when the DJIA increased a total of 21%.
 
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Last edited:

THR

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Yes, it is possible.

An interesting book to read on this topic is The Little Book of Common Sense Investing by John Bogle.

There are brilliant minds who develop market beating behaviours. One such individual is John Simons. Unless you are in this category (or are fortunate enough to be an INSIDERS invited to one of their funds), trying to beat the market is basically gambling.

There are plenty of anecdotal stories from the likes of your best friends uncle or a stranger on the internet who has been beating the market for 20 years, but the people who have lost money aren't shouting quite so loud, and there are many more of them.
 

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