Re: Is the fall & rise of the stock market a legal way of transferring wealth to the rich?

[David Farber <dave () farber net>]

Begin forwarded message:

From: Yiorgos Adamopoulos <yiorgos.adamopoulos () gmail com>
Date: September 8, 2009 10:11:16 AM EDT
To: dave () farber net
Cc: ip <ip () v2 listbox com>
Subject: Re: [IP] Re: Is the fall & rise of the stock market a legal  
way of transferring wealth to the rich?

On Tue, Sep 8, 2009 at 4:51 PM, David Farber<dave () farber net> wrote:
> Although Tony Lauck states that "Predicting the future course of  
> markets is
> logically impossible",
> doesn't a very rich guy, who can hire million dollar analysts, have  
> a MUCH
> better chance
> (opportunity!) than the average middle class guy of predicting when  
> any
> given stock will most
> likely rise and fall?

In "Title: A Computational View of Market Efficiency"
(http://arxiv.org/abs/0908.4580) the authors claim that:

"a high-memory strategy can make a bigger profit after a low-memory
strategy has acted and modified the market pattern. This profit is
bigger than the profit that is obtainable by a high-memory strategy
without the low-memory strategy acting beforehand, and even bigger
than the profit obtainable after another high- memory strategy acts
beforehand. Thus it is precisely the presence of low-memory strategies
that creates opportunities for high-memory strategies which were not
present initially. This example provides explanation for the real-life
status quo which sees a growing quantitative sophistication among
asset managers."

So it seems that rich people do get richer because of the strategies
and (lack of) resources of the average middle class guys.
--
You have new gmail.




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