http://www.traderji.com/112869-post1.html
Except hand few of are we really trying ? Still nobody can teach me WHY it gains/losses.
Most of the Boarders here are Smart / Intelligent / Logical still nobody can take an effort to teach me.
We will pm to collect for s/w's giving Buy/Sell ,hanker to gather ALL Tips,as if those are our going to make us Rich overnight,why cant we try to learn ourselves at least 0.001% ,Trust me no S/W ,no Tips can make us Rich,let us plz try,any proffessional qualification needs dedicated Time to learn,then why dont we try this proffession,our laziness & mental blockade is just making "Sly by Night Operators Rich".
Except hand few of are we really trying ? Still nobody can teach me WHY it gains/losses.
Most of the Boarders here are Smart / Intelligent / Logical still nobody can take an effort to teach me.
We will pm to collect for s/w's giving Buy/Sell ,hanker to gather ALL Tips,as if those are our going to make us Rich overnight,why cant we try to learn ourselves at least 0.001% ,Trust me no S/W ,no Tips can make us Rich,let us plz try,any proffessional qualification needs dedicated Time to learn,then why dont we try this proffession,our laziness & mental blockade is just making "Sly by Night Operators Rich".
Stock market returns in the long run (L) is a function of return on gilt (G) and a risk premium which the investors demand for undertaking risk (P). Markets in the long run are devoid of excessive noise and tend to move along with expected returns.
Thus, we can express the same mathematically as:
L = G + P
Stock market returns in the short run (S) is a funtion of noise (which includes news trading, raw technical analysis [popularly called momentum trading], accounting manipulations, and any other factor which creates a delusion that active trading is profitable). Let this be called N.
S = Summation of N
Returns in the long run are nothing but summation of short run returns. (L = Summation of S)
Thus,
Average N (or n) = G + P.
Here, Gilt returns are fairly constant over time.
Thus, the premium expected on stock varies directly to the amount of positive noise but since G is always positive, the long run return too is positive, unless the noise is exceptionally negetive over a long period of time. A scattar diagram above and below n indicates market upmoves and downmoves.
Hope this served as a good explanation. It's my own understanding ofcourse.
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