Readings: Baltic Dry Index, Short selling, Why investors fail
- Big Picture / CNBC: Video: David Einhorn, Greenlight Capital, William Ackman, Pershing Square Capital
Bunch of excellent videos thanks to Barry; can’t embed them here unfortunately.
- John Mauldin: Why Investors Fail
Past performance is pretty much worthless when it comes to trying to figure out the future. The best use of past performance is to determine how a manager behaved in a particular set of prior circumstances.
Statistically and mathematically all these tools—stochastics, RSI, chart patterns, Elliot Wave, and so on—just don’t work. If you code any of these rigorously into a computer and test them they produce no statistical basis for making money; they’re just wishful thinking. But I did find one thing that worked. In fact almost all technical analysis can be reduced to this one thing, though most people don’t realize it: the distributions of returns are not normal; they are skewed and have “fat tails.” In other words, markets do produce profitable trends.”
Must read for any investor / trader / speculator!
