”Börsapan” slog både fondproffsen och index
Vid årsskiftet utmanade Di:s ”börsapa” fjolårets mest framgångsrika Sverigefonder med en slumpmässigt sammansatt portfölj.
Nu står det klart att apan slagit både index och fondförvaltarna under årets första kvartal.
DI 7 april 2022
Di:s ”börsapa” slår fjolårets bästa Sverigefonder och index
“A blindfolded monkey throwing darts at a newspaper’s financial pages
could select a portfolio that would do just as well as one carefully selected by experts.”– Burton Malkiel, author of “A Random Walk Down Wall Street”
Burton Malkiel’s metaphor has been one of the most controversial in Wall Street. It questions an active manager’s ability to outperform the market and reduces outperformance to sheer luck.
Although the book “A Random Walk Down Wall Street” was initially published in 1973, this quote still remains one of the most controversial among active asset managers.
“Any monkey with a dart may possibly earn money in a rising market.”. Well, this stands true, and apparently, even monkeys blindfolded or not can make money in a bull market.
The random walk hypothesis does not mean that companies (and their stock price) rise and fall randomly.
The existence of persistently successful investors like Warren Buffett suggests that long-term investments based on a business’s fundamentals can pay off, and all investors can ride the slow, steady upward trend of the market.
But the random walk hypothesis would mean that Wall Street types delude themselves when day trading and trying to arbitrage short term fluctuations in a stock’s price. It would mean that daily fluctuations are too random to predict by a stock’s trading history or news announcements. All those day traders — by the random walk idea — are simply confusing the signal for the noise.
https://priceonomics.com/how-well-do-blindfolded-monkeys-play-the-stock/
Random walk theory proclaims that stocks take a random and unpredictable path that makes all methods of predicting stock prices futile in the long run.
Sharp and Malkiel concluded that, due to the short-term randomness of returns, investors would be better off investing in a passively managed, well-diversified fund. A controversial aspect of Malkiel’s book theorized that "a blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts."2
The most well-known practical example of random walk theory occurred in 1988 when the Wall Street Journal sought to test Malkiel's theory by creating the annual Wall Street Journal Dartboard Contest, pitting professional investors against darts for stock-picking supremacy.
Wall Street Journal staff members played the role of the dart-throwing monkeys.
https://www.investopedia.com/terms/r/randomwalktheory.asp
NOBODY KNOWS ANYTHING
most investment firms, whether they passively track a benchmark or actively pick stocks, have chosen to echo the weights of China in leading market indexes, no matter what happens.
https://englundmacro.blogspot.com/2021/09/nobody-knows-anything.html
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