Data is Beautiful

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A place to share and discuss visual representations of data: Graphs, charts, maps, etc.

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[OC] People tried to beat the stock market 100K+ times in a simulation. They lost, a lot. (lemmy.world)

submitted 2 days ago by noir_chat@lemmy.world to c/dataisbeautiful@lemmy.world

59 comments fedilink hide all child comments

Hello,

I made beatthecouch.com in July and it's basically a game where you try to beat the S&P 500 and buy/sell when you want. Your opponent is a couch. It buys on day one and never sells.

Now over 100K+ games later, the hypothesis stands: it's not wise to try to trade and time the market. Here's the original data from the actual games itself.

Source: the game's own database, every completed game Jul 12 to Aug 28. Tool: Python and matplotlib. Market data: S&P 500 daily total returns 1928 to 2019.

thanks!

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[–] Knock_Knock_Lemmy_In@lemmy.world 2 points 1 day ago* (last edited 1 day ago) (1 children)

Have previously been incorrect to an extent.

Your insert of "Previously" is misleading. There exists no evidence that active management will be more correct in the future either.

value-based investing is more successful than index tracking

You fundamentally misunderstand. You can invest in indicies that track value. The important point is the need to avoid the management and transaction fees of active funds.

[–] eyesaremosaics@lemmy.zip 0 points 23 hours ago (1 children)

Your insert of "Previously" is misleading. There exists no evidence that active management will be more correct in the future either.

It's not misleading, it is entirely factually correct. The word previously refers to the past, and all comparisons are about past performance.

The important point is the need to avoid the management and transaction fees of active funds.

In that case you are referring to investment decisions based on very simplistic formulations. These don't do any detailed analysis of actual businesses and how they operate.

If everyone did this, markets simply would not function, at all. You'd have a Keynesian beauty contest at best, but overall bad investment decisions and a stagnant economy. The more the market is dominated by simplistic funds the less it behaves like the past 100 years, and the less useful past statistics are at predicting the future.

[–] Knock_Knock_Lemmy_In@lemmy.world 1 points 23 hours ago

It's not misleading

It is. There is absolutely no evidence that future performance will favor active management.

The more the market is dominated by simplistic funds the less it behaves like the past 100 years, and the less useful past statistics are at predicting the future.

Citation needed.

At the extreme I agree with you. If 100% of investors are passive then there is no information discovery. But words like "dominated", "less useful", "stagnant" betray your bias and weak foundational thinking.

Academic consensus is that, net of fees, average active management does not beat a low-cost index fund.