It is interesting to note that there is a reliable method to beat the stock market. Claude Shannon (the genius who created information Theory) came up with it a few decades ago.
The system actually works - but wouldn't work in reality since your profit would be eaten up by the trading fees. But it is still an interesting intellectual curiosity to see such a system which works in theory. It reminds me of those perpetual motion machines which would work if it were not for friction acting on the system. In this case it isn't friction - but trading fees which prevent a proft been realised.
The details can be found here:
http://www.castrader.com/2006/10/the_shannon_met.html
I first came across it in one of the very best books I have read.
http://www.amazon.com/Fortunes-Formula-S...0809045990
The book is 'Fortune's Formula' by William Poundstone - and describes the story of mathematicians such as John Kelly and Edward O. Thorp in there early efforts at developing gambling systems for beating casinos at Blackjack. Before later extending them into the world of the stock market.
Today - Edward O. Thorp is a billionaire hedge fund manager. And the story of John L. Kelly is equally interesting - since he was one of the most brilliant people of the twentieth century. Yet is largely unknown today.
The system actually works - but wouldn't work in reality since your profit would be eaten up by the trading fees. But it is still an interesting intellectual curiosity to see such a system which works in theory. It reminds me of those perpetual motion machines which would work if it were not for friction acting on the system. In this case it isn't friction - but trading fees which prevent a proft been realised.
The details can be found here:
http://www.castrader.com/2006/10/the_shannon_met.html
I first came across it in one of the very best books I have read.
http://www.amazon.com/Fortunes-Formula-S...0809045990
The book is 'Fortune's Formula' by William Poundstone - and describes the story of mathematicians such as John Kelly and Edward O. Thorp in there early efforts at developing gambling systems for beating casinos at Blackjack. Before later extending them into the world of the stock market.
Today - Edward O. Thorp is a billionaire hedge fund manager. And the story of John L. Kelly is equally interesting - since he was one of the most brilliant people of the twentieth century. Yet is largely unknown today.