Unlock the secret to outperforming top investors. It's not just about buying right, but knowing when to sell. Discover the art of timing the market, a skill that could elevate your investment game to new heights.
When it comes to picking which stocks to sell and when – even the best in finance are no better than a drunken monkey throwing darts
Billionaires and gigantic institutional investors turn to these financiers because they want their investments to make the most money possible, which requires making the right calls on both buying and selling stocks.
- New research confirms they’re whizzes when picking the right stocks to buy and sell, but not when picking when to sell
- This study began as a feud between two PhD students in graduate school
- Lawrence Schmidt, now at the Massachusetts Institute of Technology
- and Alex Imas, at the University of Chicago Booth School of Business
- They wondered whether these elite investors make systematic mistakes when trading
Both athletes make history
Oborududu became the first Nigerian athlete to win an Olympic medal in wrestling.
- Mensah-Stock spoke about her desire to inspire Black girls to pursue wrestling and her family’s heritage in Ghana, where her father was from.
Emotions hit hard with win
Mensah-Stock curled her hands into a heart-shaped gesture immediately after her win, smiling and bowing to the small crowd in the Makuhari Messe Hall outside Tokyo.
- She then hugged her coaches and grabbed a large U.S. flag, which she held high above her head.
Fancy-schmancy financier vs. drunken monkey
The economists analyzed data on 783 big-time investors from January 2000-March 2016
- Compared the investors’ trading decisions with what they could have done instead
- Big finding: these financiers are whizzes when it comes to buying stocks
- But when they looked at their performance when selling stocks, they found that they were worse than a monkey randomly throwing darts
Mensah-Stock overcame a brutal draw to reach the final
She defeated Sara Dosho of Japan, the 2016 Olympic gold medalist and 2017 world champion.
- In her semifinal match, she faced another former world champion in Alla Cherkasova of Ukraine, and after falling behind early, she recovered late to win 10-4
- This is the second medal for the U.S. women in Tokyo, coming one day after five-time world champion Adeline Gray won silver in the 76-kilogram category.
The title of their study is “Selling Fast and Buying Slow”
The basic theory they landed on is that these investors spend much more brain energy on buying stocks than selling them.
- To test this theory, the economists looked closer at which stocks the investors tended to sell and which ones they tended to hold.
- And it turns out that the investors aren’t horrible at selling all stocks. Their selling decisions are also much better when it comes to the best- and worst-performing stocks in their portfolio.
