Dave,
I hear you. Most of the people I know are traders, so this is a mute point amongst us, as we all derive our living from the markets, some of us a more humble living then others.
But I have learned an important lesson in life (more than one I assure you.) Some people will believe what they want in the face of _any_ evidence, even smart people.
Here is the funny thing. When you are doing OK as a trader or investor, people will argue with you that it cannot be done. You argue back that it can because in a sense, if these people are your friends, you want some sort of recognition from them, or in some cases, you simply believe you have done something hard and want to let the world know how smart you are.
But a funny thing happens when you are blatantly good and start having monster years. All of a sudden, if you are that kind of person, are driving Ferrari's and are moving into a $5M house on ocean front property, are sending your kids to private school, and can take a year or two off to go and see the world, well, you get the picture (the old rich call this the nuveau rich, but hey, I can't blame someone for enjoying the spoils of their success a little bit
)
_NOW_ your friends, old ones and new ones that you don't ever remember befriending, believe you are God and want to know what you are doing. A funny thing happens though, YOU NO LONGER WANT TO TALK ABOUT IT, because the success is it's own reward and there is nothing in it for you. But even in this case, _some_ people will write you off as a statistical anomally, as a lottery winner. But you know what, you no longer care! LOL
Leave the discussions of whether one can "beat" the market to people that don't know, and think they know. Steer the conversation back to sports or the weather or to how many angels can dance on the head of a pin...I learned that lesson myself not too long ago...
nitro
Quote from wdscott:
Nitro,
Although I have not read the book, I would like to comment on the confusion many people have between the differences of investing vs trading.
I agree with your comment that the author as well as most people can't seem to differentiate between investing and trading. I have a couple of friends in various fields who are JD, CFA, CPA's and when the topic of short term trading comes up, which I comment on, they think I'm nuts.
Many heated topics arise with my CFA friends discuss EMH (efficient Market Hypothesis) and its supposed outcomes. I am not a finance major nor college graduate , but I do know this hypothesis does not include human behavior. A key element to auction markets and price discovery.
Although I throw them a bone and agree that at a given point in time the market can be in equilibrium, most of the time, especially in the shorter intraday time frame, their is plenty of opportunity by the market being either above or below it's intrinsic value level.
Wherein The ability to profit lies.
Yes. you can make excess returns on a risk adjusted basis basis by short-term trading. I do it almost daily. Just because they don't know how to do it, I think frustrates the hell out of them.
And will all those Ph.D.'s hanging on the wall, if they can't figure it out, it must not be possible.
Regards,
Dave Scott
