Lewis outlines the story of Dimensional Fund Advisors, which advises its clients to not churn stocks unlike other firms that actively trade. Interesting quotes:
"If you wake up in the morning and see Warren Buffett's face in the bathroom mirror, go ahead and buy some stocks. If you see anyone else’s face, diversify.”
"If you put a thousand people in barrels and push them over Niagara Falls, some of them will survive. And if you take those guys and push them over again, some of them will survive. And they’ll write books about how to survive being pushed over Niagara Falls in a barrel."
Whether the efficient market hypothesis is right or wrong is beside the point - what is really important is that there is absolutely no information in the past stock price data. Without insider information, everybody is better off buying low cost index funds or ETFs.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment