From the course: Finance Foundations (2019)

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Can you pick stocks in the stock market?

Can you pick stocks in the stock market?

From the course: Finance Foundations (2019)

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Can you pick stocks in the stock market?

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Now, can we, as individual investors, use our ability to analyze financial data and economic trends to identify winning and losing stocks? No. The market's just too fast. The market reacts to new information very quickly in minutes. For example, there are smart people in New York whose job it is to identify all new share-relevant information, load it into supercomputers, and do the data analysis to find mispriced publicly traded stocks. No academic research in accounting or finance has found any reliable evidence for profitable, implementable trading strategies based on publicly available financial statement numbers. By the time you have used your analysis to pick an undervalued stock, it is a week, two weeks or two months too late. Yes, there are people who are making money buying and selling stocks. Part of this is luck. Even in Las Vegas, some people win. Part of this is business context. Experienced analysts are privy to all sorts of industry data that regular people don't see…

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