Many statistics based on the performance of hedge funds have led to the conclusion that it is impossible to achieve consistently superior profits
Many statistics based on the performance of hedge funds have led to the conclusion that it is impossible to achieve consistently superior profits in the market through rules or formulas, as these are no better than a diversified investment structure chosen at random. This has prompted financial theorists to explore why a well-functioning financial market naturally eliminates excessively high profits over extended periods. The Efficient Market Hypothesis (EMH) provides one explanation.
An efficient market is one where, at any given time, all new information is immediately captured by market participants and reflected in market prices. This leads to a random walk, where market prices fluctuate unpredictably and cannot be forecasted over time. Studies of stock price indices, both for entire markets and individual assets, reveal that their movement charts resemble the outcomes of flipping a coin at random.
Although I disagree with the notion that markets are fully efficient, I do not dismiss the idea that prices operate randomly. In fact, randomness governs many phenomena around us, originating from the smallest quantum particles. This randomness may not be something mystical but rather a reflection of our limited computational capabilities and the lack of sufficiently robust models to fully capture and understand it. 📄 Many statistics based on the performance of hedge funds have led to the conclusion that it is impossible to achieve cons
Contradiction
New source claims that many studies on hedge fund performance have concluded that it is impossible to achieve superior returns in the market, but previous source claimed that it is impossible to achieve consistently superior profits.