Efficient market theory; Total junk still being taught to people?
- Thread starter jbtrader23
- Start date
Quote from Babak:
"unlucky"?!?!? That is a whopper of a euphemism! You should be a spin doctor on the pay roll of a political party!!
They basically brought the financial world to the brink of total collapse!! 'got unlucky'.....
The only reason they made more money was because they were using leverage. What they were doing was not at all new or innovative or in any sense of the word worthy of 'genius'.
They were using well known arb opportunities that everyone on Wall Street had known about for years. The only thing was they were using MASSIVE leverage. I'll say it again: MASSIVE!!
I will never give those guys any respect. It is paramount for a trader to take responsability for their actions and the outcome. These guys never did and never will.
I find it fascinating that you don't say "They got lucky those first few years." but rather say "they were unlucky in the end".
If we introduce 'luck' into the scenario....then what is to say that the first few years was simply luck and not skill and their demise was simply the reversion to the mean?
ohhh .....ok, now I got it!
Your knowledge of what they were doing seems to be very perfunctory.
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That one sidedness is remarkabley naive. When you are making money, it is because you have a PhD and are smart. When you are losing money it is because you got 'unlucky'.
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Once again, they WERE correct in their final "unlucky" bet. Had they had the resources to stick with it, people would still be praising them all over the place.
Were they just lucky when they were making money? Maybe somewhat, only to the extent that they correctly knew when others would realize that those others were wrong.
Had they been losing in a streak and got to the final point that way, I'd agree with you. But just b/c they had one fatal blunder call them idiots, don't think so.
Vlad, as much of I have read your posts on this thread, I don't see that you have really laid out any reasons. You are rehashing the same things in each post.
How could it possibly be more efficient. If I took George Soros and Warren Buffet to Kroger and said "quick, which is the best value per ounce the, 12 oz, 16 oz or 32 oz Coffemate?' I doubt even they could come up with the correct answer in a spilt second.
Which leads me to the second point that where volatility is nothing new, VOLATILITY is a HUGE inefficacy of the market. GE traded in a range of $26 to $24.63 during the course of Friday's trading session. So I am to assume that the BUSINESS PROSPECTS of GE changed so much from 9:30 to 4:00 on Friday that it warranted a $1.37 swing in it's shareprice. That is laughable, in fact I am laughing now.
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THE ABOVE IS THE EXACT REASON I CALL IT LESS EFFICIENCY, PLAYERS NOW MUST MAKE A SPILT SECOND DECISION ON VALUE. CHANCES ARE, GIVEN EMH, THEY WILL BE wrong.
I'm not calling them idiots because they tripped and fell down. I'm calling them idiots because they are so full of themselves that they believe that they can dictate to the market what it should do. And when it doesn't do it, rather than becoming humbled and admiting they were wrong to do what they did, they become even more adamant that they know what is best.
My knowledge of their strategies is as perfunctory as yours or anyone else's on this board.
[By the way, superficial is a more adequate "big word" since perfunctory implies a lack of enthusiasm as well as a lack of deepened understanding.]
Only those privy to the inner workings of the fund knew them exactly. Through leaked documents we know they were engaging in the Royal Dutch Shell arb (just like hundred's of other hedge funds out there) the difference being that their position was MASSIVE.
They were in the 30-year treasury arb, again just like many other arb funds, etc. Except they were doing it on a MASSIVE scale. And etc....
They were doing nothing new. They were just doing it bigger than anyone else (because others were smarter to not take so much risk).
Hey, if you want to believe that those guys were geniuses. Go ahead! You are in good company. They had all of Wall Street hoodwinked at one point.
If they hadn't blown up in 1998, they would have some time down the road. What they were doing was playing financial Russian roulette all the while actually thinking they were playing a simple and harmless hand of 'Go Fish'. And the reason why you can say that in the end they were right is because hindsight is 20/20.
In the end, they were idiot savants. They knew how to crunch a mean spreadsheet, but were bereft of common sense.
I can cherry pick my responses but you can't, many players could be as good as Jordan if they just practice early enough, technical analysis is for three year olds, I'm better than you because I'm an academic, you have to be realllly smart to make money so why don't you forget it, my super special method shows a 98% hit rate (!!!) on a method that holds trades overnight no less(!!!!!!), ten months ago I was a virgin newbie ready to go with Ameritrade and now I'm trading a millllion dollars, communism didn't fail you're just close-minded, LTCM didn't fail you're just close-minded, demonstrated inefficiencies don't mean the markets are inefficient...
WHY IS ANYONE STILL TAKING THIS CLOWN SERIOUSLY
WHY IS ANYONE STILL TAKING THIS CLOWN SERIOUSLY
I did not cherrypick my responses, I tried to respond to each and every attack. I did not say anyone could play as well as Jordan, only those with innate abilities and training, can you freaking read???
and yes, if you are not smart enough, then do forget about makin money trading, that WAS what I was saying. One of my main methods IS based on overnights, and it IS working perfectly. I WAS a virgin newbie trader ready to go with Ameritrade (by the way, for my method it would have worked just as fine). And if you are bitter that I got from a virgin to above a mil in funds traded over less than a year, then it only tells about who you are, not me. The rest of you above-mentioned crap only shows how you didn't get anything I said.
We'll see who is the clown in the end.
Moderator, please close this thread. I'm tired of talking to the deaf. Those you PM'ed me with supportive messages - thanks.