Perhaps more to the point: Buffet's results are unlikely (though likely the result of many different strategies, some successful, others not...), but in a market with so many investors, it is perhaps not so surprising that one so successful arose?
> Buffet's results are unlikely (though likely the result of many different strategies, some successful, others not...), but in a market with so many investors, it is perhaps not so surprising that one so successful arose?
Quite correct, in fact, in an equities trading community the size of the present one, successes like Buffet's can and do result from chance. This is not to claim that any particular one does result from chance, only that this possibility is the first one that a scientist or statistician would need to consider.
That wasn't Buffets point; his point is that those who followed certain strategies of value investing consistently win and he gave examples. That's more than a random outcome.
> That wasn't Buffets point; his point is that those who followed certain strategies of value investing consistently win and he gave examples.
"Consistently win" is obviously false. If someone had an actual method (not a random unexplained event) with a description, that could be tested and that could consistently beat market averages, it would surely be applied and the market would collapse. The market didn't collapse, so there is no such method.
How is that so hard to figure out? There is no winning strategy, no secrets of the winners. There are people who make more than others in equities, but not because of a describable, scientifically testable system.
When a scientist encounters a description like this, he always assumes a priori that it's chance. That agrees with the null hypothesis and Occam's razor. It also keeps people from selling him worthless investment books.
You're restricting yourself with the giant caveat that the system must be perfectly deterministic (i.e. capable of being executed by code). Why? For the convenience of your testing?
An analogy: humans have beaten computers at Go for decades. Is the human strategy random chance? It must be, since they cannot write down their algorithm so well that anyone else can be a Go master!
Go strategy (similar to investment strategy) cannot be perfectly laid down (though the general principles can), and yet the results are clear. Would you argue there is nobody inherently better at Go than anyone else? Even if they are the best performing Go-perfomer ever, who has beaten every computer system for decades and decades?
I'm not sure how much of a butt-kicking Buffett needs to perform against the market for you to believe there may be an element of skill at play.
> it would surely be applied and the market would collapse. The market didn't collapse, so there is no such method.
You keep saying that, but it's full of assumptions that simply aren't true. Just because a successful method exists does not mean everyone can or will apply it nor does it mean the market will collapse.
> How is that so hard to figure out?
How it it so hard for you to see the absurdity of what you're saying?
> When a scientist encounters a description like this, he always assumes a priori that it's chance. That agrees with the null hypothesis and Occam's razor.
There's a reason scientists are in general not rich people. And I have much respect for scientists, but you're just being absurd.
Investigate a bit before just claiming it's nonsense because you're not giving it the thought you should, you're just presuming you're right and making absurd claims based on absurd assumptions that don't hold water.
