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Re: [sharechat] Hugh's Test

From: "Jeremy" <>
Date: Tue, 26 Jun 2001 19:24:47 +0800

>       Sorry, but I don't know where we have seen that lately. Please
enlighten us all. Perhaps you are referring to Hugh's silence in the face of
my logical argument.
>               Phaedrus.

The problem is you saying your argument is logical.  You have assumed that
because you can draw a line of a chart showing a trend you can extrapolate
the future, or at least make a logical decision at that point.

Trends are always apparent in historic data, but extrapolation of a trend
from NOW in an inherently chaotic system (I use the term in a correct
mathematical sense) produces no net benefit.

Objective studies show this time and again.  Burton G Malkiel "A Random walk
down Wall Street" contains many examples.

For you to prove your point that you have a system that -on average- exceeds
the market you have to produce documented evidence over many years that it
works.  Not that you have made money - I am sure you have - but that the
system at time T, using only data known at time T, can predict the future
price on a variety of time scales and hence allow you to make money above
and beyond the natural market growth.

"You" have all the data possible to demonstrate your point.  Every possible
measure of market price and volume.  Yet I have never seen a published
objective model of the market, using only price data and volume before a
particular time T, that correctly predicts -on average- the future price of
shares and hence makes objective decisions about buying or selling.

I am sure you can quote many examples of when you have made money.  But I am
equally sure you can't consistently publish buy and sell recommendations
before the event that make - on average - better returns than the overall
market.  At least not decisions made solely on trading figures.


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