Wednesday, 4 May 2016

Professor Fama: How Markets Really Work

Bill Sharpe, The Arithmetic of Active Management

'In aggregate active investors hold the market portfolio, so if some skilled active investors overweight an undervalued stock, other active investors must underweight it. This means that, before fees and expenses, trading is a zero sum game. Ignoring costs, the gains of the skilled investors are, dollar for dollar, at the expense of other investors.'

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