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The StockTwits® Edge: 40 Actionable Trade Set-Ups from Real Market Pros
book

The StockTwits® Edge: 40 Actionable Trade Set-Ups from Real Market Pros

by Philip Pearlman, Howard Lindzon, Ivaylo Ivanhoff
July 2011
Intermediate to advanced
355 pages
9h 12m
English
Wiley
Content preview from The StockTwits® Edge: 40 Actionable Trade Set-Ups from Real Market Pros

CHAPTER 9

Dividends Don't Lie

Eddy Elfenbein, @crossingwallstreet

Crossing Wall Street was one of the first blogs I discovered about markets back in 2005. Eddy has always had a clear voice and knows how to explain trends and other complicated financial topics in a digestible way. He's got a great sense of humor as well. He is a veteran in all the good ways, and his blog is a must-read.

In the short run, the market is a voting machine. In the long run, it's a weighing machine.

—Benjamin Graham

MY PROFESSORS WERE WRONG

When I was in graduate school pursuing my MBA, my professors lectured me about the efficient markets hypothesis (EMH). This is the idea that capital markets work so well that they incorporate all known information about a stock. As a result, it's impossible for an investor to outperform the market consistently.

Sure, some people could beat the market for a while, but that was all a matter of dumb luck. A successful investor, the professors said, is no more talented at investing than a coin flipper is at flipping coins. Oh, please! I knew this was nonsense. Later on, when I worked in finance as a professional, I saw how good investors routinely beat the market. Not just once or twice, but again and again and again.

Still, the EMH crowd never lets up. Funny, we never hear that it's impossible for an investor to lose to the market consistently. But that's what the EMH implies as well. No, we're told only that it's about failing to beat the market. What a bunch of ...

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Publisher Resources

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