The Market is Always Right.

Discussion in 'Trading' started by areyoukidding?, Aug 29, 2005.

  1. What do you think of this age old axiom?
  2. The title of this thread sounds like a re-formulation of your other thread's title: "10% of traders take money from complainers".
  3. nice. clever.
  4. Are you "NoMoreOptions" alias?
  5. The market is neither right nor wrong, it is what it is. There is no higher being called the market which makes decisions, the participants set prices based on various factors, boiled down to supply and demand.

    It is not whether the market is right or wrong, it is whether you were right or wrong in the position you entered into based on an expectation of what the market was going to do in a specified period of time. You do not beat the market since the market is not your opponent.

    People talking about beating the market refer to indexes such as S&P and Dow. These indexes are just products marketed by DOW and S&P for profit and they are not the market at all. These indexes constantly dump losers and swap in winners so that they can better sell their product. The DOW has 1 original stock from its inception and the S&P changes a little each year (not counting stokcs dropped who went out of business).

    There is no "market" to compete with. The only goal is to make money consistently in double digits year after year no matter what anyone else is doing.

  6. sure, I think that's a true axiom - in that, the market is made of up of 90% losers - the 10% winners know this and therefore take advantage of others' mistakes.

    the "market" trades on "reality" i.e., what could/should/would be. those who "beat the market" trade "market reality" i.e., the way it is.

    at least that's what I do to beat the forex market.

  7. My attitude with markets is to try to decipher the story they have to tell about the economy. I look at stocks, bonds, fx, oil and gold and try to come up with a single coherent explanation for their behavior.

    I stopped buying Barron's 20 years ago, the WSJ over 10 years ago, and now I only look at numbers. Sometimes, when data doesn't seem to make sense, I leave my den and hunt for information from research papers or statements from central bank governors that will broden my knowledge and help me find explanations for new situations.
  8. Seriously what is with the all the thread starters? We don't need 4 threads all discussing the same thing day after day.
  9. haha...

    I've heard this saying many times.

    The best explanation I've read about this is from "Phantom of the Pits".

    In this book, the Phantom has said that if the market were always right then the majority would have to be wrong in order for me to make money.

    This is the irony behind trading: is a contrarian approach profitable when the market is "right" or when the market is "wrong"?

    It is all B.S. IMHO...

  10. What do you mean?

    This thread: The market is always right
    10% beat the whiners
    Oil will dump.

    I dont understand. Im just trying to liven it up here. This site is way too negative and not very interesting unless if you want to bash Cramer or anyone else that makes coin. I dont get it, this is the home of the Elite, why does everyone complain?
    #10     Aug 29, 2005