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Old 10-03-2005, 12:41 AM
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Default Re: Is the stock market +EV?

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Adios,

I will direct you to Hirsh's Stock Traders Almanac, for simple strategies that beat long term buy and holding the SP500, at reduced risk.

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If there are so many "simple strategies" for beating the market, Why do the MAJORITY of mutual funds find it so hard to beat the s & p 500 consistently? Why do they suck so bad when they spend hundreds of man hours studying stocks, while a person sitting with an s & p 500 fund spends a total of 5 minutes buying their fund and beats them?

As Benjamin Graham said (summarized), beating the market on a continual basis is a task that is not as easy as it sounds. It requires a fundamental understanding of historically proper investment strategy (i.e. value investing). I take what I like to call a modern approach to value investing, mixing in some growth characteristics and discounting the importance of book value in the modern market. My performance over a 10 year period has averaged 5% more growth per year than the s & p 500. Statistical anomaly? Maybe, but if you can't be good, then get lucky!

Whatever the case, EV+ is much larger in the stock market than in nearly all investment vehicles. Low risk over the long run (short run fluctuations can definately occur) and high return, what more could you ask for.
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