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Old 11-01-2015, 08:41 PM   #3
Franchise Player
Join Date: Dec 2006
Location: Calgary, Alberta

Originally Posted by GGG View Post
Isn't this point fundamentally wrong. For longs and shorts fine but the entire stock market is based on economic growth giving the player the edge instead of the house.

I disagree with your general premise entirely. In poker some players are better than random distribution of luck would indicate. The same can't be said in investing.
First of all, thank you for reading and posting something!

To your first point, I'm not sure I understand what you mean? I do agree that the stock market is based on growth, but the gains an investor makes are still at someone's expense. It doesn't necessarily feel like that, but it is the way it works.

As far as the general premise, that is a whole other discussion (and one that I would love to have to be entirely honest!), but I do believe that there are investors who do better than luck. There is a book about the luck vs. skill spectrum which goes through investing as well as a number of sports and other areas that is quite fascinating. Its an easy read written by Michael Mauboussin and his premise is that he thinks a lot of things, including investing are a combination of skill and luck.

I don't know how far you want to get into the whole discussion here about whether investors can do better than random luck. I will just say that even the passive strategies that are more in vogue today require a lot of decision making for the investor. Because of that a lot of factors like investor psychology and their assessment of risk comes into play.
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