That makes far more sense that how he stated it, but let me explain how I'm looking at it. The market is biased long, purely from a historical perspective. Also, as stated by someone else, even if the market didn't trend up over time, the probability of it doubling is, in the real world, infinitely higher than the probability of it going to zero. So, again, the market is biased long. The probabilities are NOT normally distributed. So what does that leave us with? That leaves us trying to toss a coin to make a red/black call on a roulette wheel that's biased towards black. It just doesn't work over time.
The long bias is entirely due to the issuance of credit and the devaluation of money (they go hand in hand) This in turn brings us all back to your rather broad "buy and hold" theory. sosueme
Once again, and for the last time: You are confusing the probabilities of a DECISION SYSTEM, with the historical probabilities of returns of the market. Two different things. If you wish to stay confused, that is your choice. 3-4 different people have tried to explain it to you...
You will have to prove to yourself and others that your suggestions bring in at least 1 tic per day on average extra profit over the original method rules.
There's no decisions at all. Can you play head/tails = red/black and come out break-even if the roulette wheel is biased 0.48-red/0.52-black?
Then if you want to assume that the market is truly flat over time, then the coin system is a massive loser due to the same forces that make the market trend up. Where does that put us? Back to where we started, buy and hold beats coin toss.
Exactly. So there's nothing break-even about your coin toss system. I could buy/sell based on what shade of brown my morning shit is - I'd have just as good of a chance to win.
I just don't get why he can't see it. Maybe he does and it's just too hard to admit such a simple and basic flaw after 65 pages of ranting and raving like a dick.
Since in buy and hold, you never sell by definition, you do not beat anyone except yourself. Might as well donate the money. Preferibly to me.