Re: Investing

From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Sun Jun 15 2003 - 09:32:46 MDT

  • Next message: Rafal Smigrodzki: "Re: Investing"

    ----- Original Message -----
    From: "gts" <gts_2000@yahoo.com>
    To: <extropians@extropy.org>
    Sent: Sunday, June 15, 2003 8:39 AM
    Subject: RE: Investing

    > Eliezer S. Yudkowsky wrote:
    >
    > >> Normal or Pareto?
    > >
    > > Hm... on further reflection, shouldn't it be log-normal?
    >
    > There really is no need here for non-normal distributions.
    >
    > One can assume a normal distribution when considering the annual returns
    of
    > traders who manage diversified portfolios. Evidence for market
    > inefficiencies would be found in a difference between the mean return for
    > expert traders vs. the market return. No such evidence exists. In fact the
    > evidence is that the market return is greater after transaction costs.
    >
    ### Yes, exactly - managers of diversified portfolios, who are ignorant
    about the technologies they trade. This doesn't apply to engineers investing
    in their own field - the true experts.

    Rafal

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