Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next
Author: albaby1 Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124  
Subject: Re: Greetings, Fool! Date: 9/16/2006 5:34 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
No question that sheer luck will influence results, and it's something to bear in mind when looking at CAPS overall, and especially so if one is planning to use CAPS to identify a 'lead steer' to follow. That said, by basing one of the critical measures of success on a probability distribution, with the top spots held only by those who can prove, statistically, that their results were not the result of pure luck, the current player rating goes a long way toward addressing your concern.

True, but bear in mind that sort of analysis depends on the number of players, not just the stats for each individual player. If you have several thousand players, there are certainly going to be a few that pick better than 2 times out of 3 over 100 picks by random chance (or whatever the stats are - I don't know that outperforming the market is a 50/50 proposition for any random stock).

Hey, I don't want to be too negative - it will be an interesting experiment. I just remember the stock-picker contests that all the financial sites used to run during the "boom" years of the late 1990's. In each contest, the winners would have ungodly returns - not because these folks had the innate ability to pick stocks with annual returns exceeding 540%, but because with so many entrants picking small numbers of stocks, someone was going to have an extraordinary return if only by chance.


Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.