WHAT DOESN’T WORK
Qualitative Stock Picking and Market Timing
Stock market timing, stock selection, etc. proves to be a money losing proposition over time.
It is best to understand that as market participants, we have NO idea where the market is headed in the short term. There are indicators for subsequent market returns but unfortunately, these returns are realized over the period of years. Looking at the market in shorter time frames is most often counter productive.
Do you ever think that you can pick a really good manager ahead of time? (it is easy to pick one after the fact). It turns out that ‘ex post’ (past) returns have very little predictive power for ‘ex ante’ (expected) returns. 99% of the investing public fails to appreciate this point.