Can you beat the market?

Steve Alexander said:
Whether you can beat the market depends on which market, what time, and you. I've been beating SPY since 1984. I have tweeted all my trades before I made them since June, 2019, @RandomFour
More...

SteveAlexander, you've got a new follower on Twitter . @Abubble , if you define "the market" as simply the S&P 500 or DJIA30, US stocks averaged an annual gain of around 9.5 % incl. dividends reinvested in the last century. Most money managers failed and will continue to fail with their mission to outperform this leading index for US stocks.

However, small retail investors can potentially profit from small moves because liquidity of markets is in most cases a non issue, while bigger positions might move the underlying one bets on and cut into profits.

Buffett has a multibillion enterprise to manage, look at how long it took for him to build up a huge position in Apple for Berkshire Hathaway.

My favorite market wizard, Tom Basso (interviewed as "Mr Serenity" in "The new market wizards" in 1991), will book 2020 as his most profitable year percentage wise thanks to big trends in underlyings as diverse as stock indices & oil, but generating returns of 10% or more year after year is very challenging without a doubt.

 
Amber_0302 said:
Market is very volatile and you don't know how it's going to play. You just need to be disciplined and constant.
More...
Vol is a traders best friend... If you can read & understand PA... this PA is a gift of many profitable handles...
 
Pro trader here (hf and ibd experience). I can tell you that beating the market is very easy, as long as you can control what your benchmark is.

For example, if my benchmark is the S&P 500, I can beat it by excluding certain sectors or industries with a negative outlook. So if the S&P 500 posts a 10% annual return, I may post a 11% annual return.

What this should illustrate is that "beating the market" is a terrible benchmark. A good benchmark is to say --if I am a growth investor, am I better at picking stocks than other growth investors? If you're a swing trader are you better than other swing-traders? That's the benchmark most managers don't beat, by definition.

Hedge funds mainly aim to produce uncorrelated absolute returns. This is very different than a retail trader. Mutual funds generally aim to produce relative returns. Gotta know your strategy and benchmark it effectively.
 
longandshort said:
A good benchmark is to say --if I am a growth investor, am I better at picking stocks than other growth investors? If you're a swing trader are you better than other swing-traders? That's the benchmark most managers don't beat, by definition.
More...
Hard to nail down those benchmarks. Or is there a swing trader registry I'm not aware of.
 
deaddog said:
Hard to nail down those benchmarks. Or is there a swing trader registry I'm not aware of.
More...
yes actually. Swing traders are really just a sub-genre of momentum trading. You can look up CTA returns and compare yours to them.
 
longandshort said:
yes actually. Swing traders are really just a sub-genre of momentum trading. You can look up CTA returns and compare yours to them.
More...
Took a quick look at google but couldn't find anything useful. You wouldn't happen to have a link?
 
You must log in or register to reply here.
Back
Top