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Kevin oildog  04-23-2008, 11:23 PM | Post #2511208
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In addition, it would be fair to say that eliminating either "performance chasers" OR "non-performance chasers" would make the market more efficient, and less able to exploit for financial gain.

That's simply not true.  Market efficiency depends on investors who evaluate securities based on their assessment of intrinsic value.  If all investors simply allocate their money based on past performance, obviously the best performers will continue to outperform indefinitely.  Such a market is not efficient.  Removing performance chasers will enhance market efficiency, but removing value investors will not.

Also, over the past 5-6 years on this forum, I have recognized a high correlation between those posters who share their portfolios and their buy and sell decisions and those posters labeled as "performance chasers."

I don't think such a correlation exists.  The post that got this thread started on performance chasing was closer's first response, which was "...I did and came to the conclusion that, when WWNPX underperforms, you get can more for your money (with far less volatility) from large-cap funds like AMAGX or FAIRX."  In other words, when WWNPX outperforms, it's worth investing in, but when WWNPX underperforms, it's not worth investing in.  How is that not performance chasing?  If you think "performance chasing" is a dirty word, would you mind suggesting the politically correct term you'd prefer us to use instead. 

Likewise, I have noticed a strong correlation between those who share relatively little or nothing about their investments and those who condescendingly finger "performance chasers."

That would make sense, since if your investment strategy is not to chase performance, you actually care about the long-term viability of your funds and wouldn't want to see their performance deteriorate due to excessive asset growth. 

I really don't think that stooping to name calling (i.e., "performance chasers") is in the best interest of this forum.   We should all be here to share our knowledge and viewpoints so that we all may learn and realize our financial goals.

Name-calling is not the issue.  The issue is distinguishing good investment strategies from bad investment strategies.  Every study I have seen indicates that individual investors who chase performance dramatically reduce their aggregate returns.  If you think the opposite is the case, I'm happy to evaluate any evidence you have to offer.

Best,
Oildog

Topics correlation FAIRX intrinsic value large-cap volatility View Complete Thread
 
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