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The 3 Simple Rules of Investing by George Peacock, Carol Fabbri, Kwok L. Tsui, Michael Edesess

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DEADLY TEMPTATION #1

Beat the Market

We told you that you must tune out siren calls to “beat the market.” Now we’ll tell you why. The basic reason is this: You are extremely unlikely to find a manager, an advisor, or a strategy that will enable you to predictably beat the market. It will be even more difficult to know whether you have found one. It will certainly not be worth the cost to try.

THE ODD BEHAVIOR OF STOCK PRICES

In their textbook Principles of Corporate Finance, authors Richard A. Brealey and Stewart C. Myers report the following event in stock market history:

In 1953 Maurice Kendall, a British statistician, presented a controversial paper to the Royal Statistical Society on the behavior of stock and commodity prices. Kendall had ...

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