There is an academic discussion that has lasted for decades over the question of whether and to what extent markets are efficient.
Larry Stay, who writes for Know More Media about investing, was writing about technical trading and stopped long enough to answer my question about whether or not stock pickers can actually expect to beat the market.
I liked his answer and recommend it anyone who wonders about such things.
I can summarize his answer to the question, can a stock picker beat the market as being "it's hard--so people who do get paid very well."
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Devin, thanks for mentioning my blog. To expand the answer I gave on efficient markets, I do believe some markets are very efficient. The Credit Default Swap Index market trades $100 million blocks for 1/2 basis point on the bid offer spread. But I think that markets overshoot, they trend, they are subject to momentum and other anomalies. Finding these is the hard part.
Thanks again.
Posted by: Larry Stay | March 10, 2006 5:02 PM | Permalink to Comment