#6
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Re: Reconciling \"Random Walk\" with \"Market Wizards\"
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[ QUOTE ] [ QUOTE ] Warren Buffett made an interesting comment about trader performance records with his famous "coin flipping contest" argument. ie. Even with millions of participants in a huge tournament someone will still win the tournament. Does that make the winner an expert coin flipper? [/ QUOTE ] Obviously not, but I think the analogy is poor. [ [/ QUOTE ] I don't think the analogy is that far-off. My experience is that a good portion of the people profiled in the Market Wizards books are the "coin flippers" who got lucky. There are some notable exceptions, including the guy I work for. [/ QUOTE ] Buffett and Paluka are correct. The "coin flipping" analogy is dead on. The overwhelming majority of mutual funds managers... That tout "outperforming" the S&P 500... In other words... Doing better than MINUS 21% (plus 2% annual dividends)... Over the last 5 and a half years... Are just the lucky "coin flippers". rm+ [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] [img]/images/graemlins/cool.gif[/img] |
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