1. Price is relative to the conditions of the transaction. That is, the first seller did not lose money to the middleman simply because the middleman sold it at a higher price. Rather, each took the best opportunity each could of their respective situation.


So if the middle man makes money, then who lost it? Or do we live in a world where hyper-inflation is imminent? If it is a positive sum game, wouldn't people figure it out and just create wealth? Then the price of goods would go up and so on and so on....


2. He advocates trend following


From eLROY: In reality, stock-market knowledge is generally wrong as soon as it is produced.


So it someone observes a trend, is that not knowledge?


3. Trend followers could do better if they were not reacting to each other's signals which simultaneously creates a more unfavorable market for the lot of them.


So it is better to set the trend than to follow it?


BTW does anyone know the actual Long-Term Capital story or are you just assuming they were wrong?