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A comment on The invisible hand that pushed Apple up and down for six years. Parent comment

Re:The invisible hand that pushed Apple up and down for six ... by JumpCrisscross on Friday December 20, 2013 @09:00AM (#6941368)
Individual investors tend to outperform the market with a 20 day holding period, with "stocks experience statistically significant excess returns of 0.80% in the 20 days following a week of intense buying by individuals, and −0.33% following a week of intense individual selling" [1]. The individual excess returns are attributable to the "contrarian tendency of individuals leads them to act as liquidity providers to institutions that require immediacy," as evidenced by "the magnitude of the excess returns" being "greater in less liquid stocks."

Shorter than 20 days and individuals compete unfavourably with professional traders' infrastructure. Longer and they compete unfavourably with the skill of professional asset managers.

[1] http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2008....

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Re:The invisible hand that pushed Apple up and down for six ... by cmdkeen on Friday December 20, 2013 @09:11AM (#6941440)
The number of professional asset managers who actually invest for periods exceeding a year is surprisingly tiny. The number of firms (especially American) that wouldn't fire someone who didn't consistently meet/beat expectations each quarter is low.

I work for a proper long term investing asset manager and we are very happy with the lack of competition in our space.

Short term "investors" are really speculating, which is fine, but call it what it is. There's also nothing wrong with using professional managers to look after your money as well, picking individual stocks takes time and paying someone else to do that is perfectly sensible. Just pick someone who genuinely invests for the time period you want to invest with them for.

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