# Do you think the stock market can be predicted?

**URL:** <https://boards.straightdope.com/t/do-you-think-the-stock-market-can-be-predicted/500392>\
**Category:** In My Humble Opinion\
**Created:** [June 20, 2009, 2:31pm UTC](https://boards.straightdope.com/t/do-you-think-the-stock-market-can-be-predicted/500392 "2009-06-20T14:31:36Z")\
**Posts on this page:** 2\
**Page:** 2

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**Author:** ![Doug\_Bowe](https://avatars.discourse-cdn.com/v4/letter/d/df788c/32.png) [@Doug\_Bowe](https://boards.straightdope.com/u/Doug_Bowe)\
**Post date:** [June 29, 2009, 6:40pm UTC](https://boards.straightdope.com/t/do-you-think-the-stock-market-can-be-predicted/500392/21 "2009-06-29T18:40:46Z")

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> [@Ruminator](#):
>
> Buffet is not a turnaround artist. He invests in companies that are already strong with existing strong management that other investors undervalue.
> 
> There have been a few exceptions to this philosophy in the past but he’s typically not interested in fixing broken companies.

Yes. Buffet buys market leaders, and he buys a significant amount so that his voice will be heard. If the company starts to wander away from profitability, he’ll show up at the stockholders meeting shake up the board of directors. Remember what he did with Coca Cola.

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**Author:** ![Trom](https://avatars.discourse-cdn.com/v4/letter/t/958977/32.png) [@Trom](https://boards.straightdope.com/u/Trom)\
**Post date:** [June 29, 2009, 6:46pm UTC](https://boards.straightdope.com/t/do-you-think-the-stock-market-can-be-predicted/500392/22 "2009-06-29T18:46:09Z")

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> [@msmith537](#):
>
> Maybe you can explain it to us then. How exactly do traders make their money? Some of these guys I know are MIT Phds while others are dumb guidos they pull in from Long Island. So I have to wonder how much is dumb luck and how much is actually recognizing those inefficiencies.

There are many, many different ways traders make money. The MIT PhDs could be running models to capture tiny fluctuations in the spread amongst various maturities in the German bond markets. They probably have the computing power and brain power to exploit that arena. They have an edge there. The “dumb guido” might trade cattle futures all day, every day. Though he can’t give you a statistical model for it, he has a feel for the order flow. He might be able to recognize when larger than normal orders are coming into the market. Based on his intuitive feel and experience, he could choose to trade with or against the institutional order flow. He is extremely focused in that one market and he has an edge there.

For the PhDs, trading is approached from a more analytical, numbers-based point of view. For the cattle trader, it is a performance based activity, much like a sport. It’s impossible to know or explain how every successful trader trades, but I’d say it’s safe to say if they have a legitimate edge, they aren’t selling in on TV for $50.

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