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Random Walk Practice

Mutual Fund Without A Strategy
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(+6, -2)
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A famous 1973 book analyzing markets discussed how trends are illusory over time and how random bets in the stock market can easily outperform the market itself.

Since then, contest style events have occured with "dart throw" picks outperforming Wall St. powerhouses.

However, I did not immediately find any investment vehicles that would make it easy to participate in this kind of "strategy".

Lottery picking data suggests that humans tend to make biased non-random choices, hence quick-pick was introduced to most lottery systems.

A mutual fund could be created to be purposefully without strategy, using "true random" strategy for balancing positions and stocks.

theircompetitor, Mar 31 2005

History of Wall St. dart throwing contest http://www.investorhome.com/darts.htm
[theircompetitor, Mar 31 2005]

Forbes Article http://www.forbes.c...6312301a_print.html
[theircompetitor, Mar 31 2005]

Bedlam Asset Management http://www.bedlampl...ek.aspx?section=pow
Their 'Pick of the Week' archive contains a large number of articles explaining exactly why large investment 'powerhouses' are rubbish. [DrBob, Apr 01 2005]

Stochastic http://www.answers.com/stochastic&r=67
A synonym for "random", "conjectural". [reensure, Apr 01 2005]


       'contest style events have occured with "dart throw" picks outperforming Wall St. powerhouses'...It seems like this isn't extremely useful information without knowing how many such contests performed poorly.
half, Mar 31 2005

       [half], note that you have to read the idea carefully before investing :) Nowhere was I suggesting that this fund would outperform the market. Merely that such a vehicle would be an interesting option.   

       Nevertheless, feel free to explore in link or just google them, you'll find lots of data
theircompetitor, Mar 31 2005

       Oh. Okay. Since you provided support for the notion that random chance has been found to outperform the market and then proposed a random strategy fund, I didn't think I was making a huge leap in inferring that you were saying this fund would outperform the market.
half, Mar 31 2005

       Manage my portfolio wisely, O Deep Thought...
Etymon, Mar 31 2005

       I'll provide you with the random data, for a fee. Pay only if you win.
goldilox, Apr 01 2005

       "Hey! This 'random data' says to invest in Goldilox Inc."
hippo, Apr 01 2005

       You're looking for a price discount model that accounts for and anticipates distribution of transaction intervals. The marketer's version of the random walk, presumably on level ground.
reensure, Apr 01 2005

       The current article suggests a strategy of selling stocks when the company is buying back and buying when they're not to take advantage of insider stock manipulation. Interesting stuff
Voice, Jul 17 2011


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