The EMH doesn't say these things are impossible, it says you got lucky and won't be able to reproduce the same gains better than chance in the future.
As another recent example I went hard into oil and gas via ETFs back in May. Why I did this is for various reasons but my conclusion was that demand would surge and supply was constrained. Almost a 2x and that’s in liquid positions. I have taken some profits but still gonna wait a bit.
According to EMH I shouldn’t be able to do this, yet here I am sitting on tons of gains.
My experience shows that more risk = more reward, and if you are careful and a student of history, you can take risk properly without blowing up.
For anyone reading this thread, just follow the path of EMH to it conclusion - trying to make an investment in a single asset is for fools. Clearly this is wrong!!!
I think it's a bit fool to live in the WSB life style, but I know plenty of people who do. They make a lot of money and lose a lot of money. They're usually more worried about retirement than I am and we make the same amount of money... this folks usually like gambling too... To each their own.
you got it the wrong way around. More reward = more risk, but the inverse might not be true.
Imagine you took crazy risk - you jump off a building, and hope that a gust of wind keeps you from dying. What is the reward?
> trying to make an investment in a single asset is for fools. Clearly this is wrong!!!
you've misunderstood the instructions for index investing and EMH. It's not saying you shouldn't concentrate and be active in choosing - it's saying that if you do, you better be someone who is more informed, and capable of pricing an investment than the market. So do you really think the average person is in that position? If not, they're better off following the market index.
For last 15 years it was about making gains at all, but now that inflation is 10% it’s how you prevent losing your money.
So much of the future depends on a tiny, unelected body that controls the global economy (the Federal Reserve) that you need to think about interest rates a lot. I come from the Austrian perspective but I understand mainstream economic reasoning so I can put myself into that mental framework when thinking about the future. However fundamentally I am a classical economic liberal, free market, Austrian.
I think inflation is here to stay for a while. I don’t think Biden and society in general can stomach a massive recession. Putting cash into short term treasuries can get you a guaranteed 5% which could be safe play given how crazy the markets are.
I am cold on AI. Everyone and their mother has been predicting self driving cars, massive job losses to automation, and so on for years. Never happens and not going to. I would avoid this industry as an investor. As labor it can be advantageous as talent is over-compensated.
I’m skeptical of electric cars. Renewables make sense in places but also a skeptic on the time frame. Would avoid electric car and ESG equities.
Residential real estate in places without strong rent control vibes is a good bet. If you can do it yourself even better - the government subsidizes your mortgage and small time landlords avoid a lot of the political intrigue. If you can get an investment property or a small multi family, I would consider swapping equities for that and let rent follow inflation each year.
Short Europe and China. Long Africa and India.
A bunch of opinions here but hopefully this fills in some pieces.
That may be the only thing I "like" about WSB: "positions or ban". Otherwise everybody would pretend that they are a genius investor doing 50% yearly easily, etc.
Anyway, it's not impossible to beat the market, but I don't know a lot of people that beat it consistently over long periods of time. Really, a few names come to mind. That's all out of millions and millions of investors. That's hard data.