Alpha Generator

Finance allah shmoop What is the random walk hypothesis The

market is unbeatable Trying to beat it by buying this

stock selling that one Good luck You're this guy you

get free real estate wherever you stop so well you

might end up here Yep Yukon gold Well you might

end up here yet but alligators swamp where Your lunch

But if you take enough random walks and even if

you find gold or ah silicon valley real estate well

eventually you'll end up here That's the random walk theory

Itjust claims that the market is unpredictable You can't beat

it pretty much Just like the efficient market theory They're

kissing cousins Well given that quite a few investors have

beaten the market over time And a few like this

guy have crushed it Well who could have come up

with such an idea And like when Well it'd be

the french of course in eighteen Sixty three This guy

julian you know well And over time a bunch of

other eggheads tried to mathematically prove that the market was

unbeatable And in fact what they proved is for average

talent people it probably is Their efforts largely revolved around

missing the notion that buying a concentrated portfolio of a

dozen or so for high quality companies and not buying

into crappy industries like airlines or paper And paul for

anything highly unionized made it a pretty decent bet that

an individual investor over long periods of time could in

fact beat the market And if you think about it

you got the s and p five hundred If you

could just get rid of the worst two or three

hundred bottom cos down there Well the top two hundred

probably do pretty well and you beat the market nicely

and get rich and you go get the by portia's

in your old age Yeah those investors Well those investors

who beat the market They're rich The professors with the

misguided not street smart math but who know a lot 00:01:59.663 --> [endTime] of vocabulary words Yet their professors