Alpha Generator

  

A good researcher. Someone who uncovers (legally) insight into given securities that are mispriced. High Alpha = High Smarts. A big swinging...brain.

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Finance: What is a Random Walk hypothesi...65 Views

00:00

Finance allah shmoop What is the random walk hypothesis The

00:08

market is unbeatable Trying to beat it by buying this

00:12

stock selling that one Good luck You're this guy you

00:16

get free real estate wherever you stop so well you

00:19

might end up here Yep Yukon gold Well you might

00:23

end up here yet but alligators swamp where Your lunch

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But if you take enough random walks and even if

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you find gold or ah silicon valley real estate well

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eventually you'll end up here That's the random walk theory

00:38

Itjust claims that the market is unpredictable You can't beat

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it pretty much Just like the efficient market theory They're

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kissing cousins Well given that quite a few investors have

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beaten the market over time And a few like this

00:52

guy have crushed it Well who could have come up

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with such an idea And like when Well it'd be

00:59

the french of course in eighteen Sixty three This guy

01:03

julian you know well And over time a bunch of

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other eggheads tried to mathematically prove that the market was

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unbeatable And in fact what they proved is for average

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talent people it probably is Their efforts largely revolved around

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missing the notion that buying a concentrated portfolio of a

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dozen or so for high quality companies and not buying

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into crappy industries like airlines or paper And paul for

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anything highly unionized made it a pretty decent bet that

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an individual investor over long periods of time could in

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fact beat the market And if you think about it

01:38

you got the s and p five hundred If you

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could just get rid of the worst two or three

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hundred bottom cos down there Well the top two hundred

01:45

probably do pretty well and you beat the market nicely

01:47

and get rich and you go get the by portia's

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in your old age Yeah those investors Well those investors

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who beat the market They're rich The professors with the

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misguided not street smart math but who know a lot 00:01:59.663 --> [endTime] of vocabulary words Yet their professors

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Finance: What is Alpha?
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What is Alpha? Alpha is an investing term that describes the success of an investment. It looks at the investment’s ability to beat beta (or mark...

Find other enlightening terms in Shmoop Finance Genius Bar(f)