Re:Are You Trading or Gambling?
by dasil003 on Saturday February 27, 2021 @09:29AM
(#26285053)
Yes but what information is important enough to move the stock price? I agree it’s foolish for individuals to try to compete with professionals, especially on a short-term window. For longer-term investing I believe the playing field is more level because once you go 5+ years out no one really has an information advantage and a huge proportion of traders aren’t even thinking on that horizon.
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The information flows are also incredibly complex and self-reinforcing with all sorts of impenetrable feedback loops.
Low wheat yield one year can cause reverberations throughout the world for many years to come. These can affect strategic decisions by businesses, which then affect strategic decisions among their suppliers, and so on.
Eventually the effects of weather patterns die out, but not before they have (perhaps almost imperceptibly) affected every business around the world, perhaps many decades after the initial event.
This, anyway, is how Mandelbrot speculated the autoregression, correlation, and long-term dependence of the markets might arise.
Trying to figure out the effects of an event in that world beyond the simplest, first-order ones is futile, no matter your resources.