+EV Investing?

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+EV Investing?

Post by MattyKGB » Wed May 01, 2013 8:26 pm

Hi all - I'm curious as to how you view the efficient market theory as applied not to sports betting markets but to investment markets.

It's tempting to think that we can make good investments by playing "hunches", for example shorting overhyped stocks like social media companies, or going long on commodities/currencies/real estate/etc that we think are very likely to increase in value. But there are banks & brokerages who employ armies of traders and PhD quants who do nothing but study these markets full time. Plus there are high frequency trading operations and arbitrageurs who are profiting at the expense of the public. We are the suckers in their game.

To me it's uncomfortably similar to the sports betting markets, only this time we are the amateur investors who are getting killed by the "edge players"...so most of my money is in index funds.


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Joined: Wed May 01, 2013 10:23 pm

Re: +EV Investing?

Post by Arch » Wed May 01, 2013 11:04 pm

Great post Matty I agree that for the most part it really is"Suckers Game". With that said I have been interested in the financial markets since the "Tech Bubble" days. I started investing (Not Trading) with a little bit of $ Since early 2000s and again during the GFC lows and made out quite well by studying the impacts of loose monetary policies on different asset classes. Most ppl I knew called me crazy for investing in commodities when they got Killed in 2008-2009 but I was confident that The Fed would pursue a very aggressive balance sheet expansion ie QE that would ultimately create a bottom an would re-inflate assets again due to monetary policies that are Anti-Volcker in nature. The key to investing for the med-longterm and making a ROI is to be all over current monetary policies and be somewhat contrarion minded,but not so much that u dont respect price signals,trends,fundamentals and especially technical analysis (Chart Reading RSI and BB bands) Well thats my 2cents on investing in financial markets

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