Risk comes from not knowing what you are doing.
Warren Buffett
Let me tell you a story.
A young man was banned from the Vegas casinos after being caught card counting. This man was a recently recent physics graduate – his name: Bill Benter.
Immediately after finishing an university physics degree, he hit the blackjack tables, trying to make a profit from his mathematical skills. Seven years later, he was winning so much that the casinos kicked him out. He then met a like-minded gambler whose expertise in horseracing complemented his own in computers.
After 9 months of building a statistical model around this horse racing to predict the winner, he tried the system in the Hong Kong Jockey Club. After 1 year, he almost lost 150.000 $ and almost quit. He couldn’t do it.
But then he included the individual decisions of all the betting people. And it was a fairly accurate predictor of the horse’s chance of success.
So, let’s be together the accurate predictor of the stock market.