Re[2]: GG: Gould & competition

[mwilliamson@alston.com]

        Well, of course, you will never convince people of this, but 
        there is really no way to "beat the market."  Sure, you can 
        UNDERperform the market if, for example, you don't diversify 
        away your alpha risk, but otherwise the market is in equilibrium 
        and all premiums for beta risk are appropriate for investors 
        seeking that risk level.
        
        But wait, you say, how did the market achieve such equilibrium?  
        Well, the industry of investment analysis is like any other 
        industry; the commodity will be provided at the level at which 
        marginal benefit equals marginal cost, and there is always room 
        for one more professional if that's really what you want to do 
        with your life.  But otherwise, from a MATHEMATICAL perspective, 
        the best thing is just to find some low-cost way to "ride the 
        market" and enjoy the fruits that are already there without 
        thinking that somehow the system can be "beat."  BTW, check out 
        how the "professionals" compare against the dartboard:  not very 
        favorably, I'm afraid.  (Although they do a little better at 
        finding very small anomalies and exploiting them with large 
        amounts of money.)
        
        But what about Mr. Gould, you say?  Well, who knows.  I 
        certainly don't know enough about that anecdotal evidence, or 
        any of the other anecdotal evidence about someone who was 
        "really smart" and made a lot of money.  First of all, we don't 
        know what kind of exposure to other less favorable outcomes the 
        individual experienced during the relevant period of time.  
        Furthermore, we don't know what kind of favorable outcomes would 
        nonetheless been experienced had different decisions been made.  
        So it's not very helpful.
        
        mw  :-)

______________________________ Reply Separator _________________________________
Subject: Re: GG: Gould & competition
Author:  <llalonde@lightspeed.net> at internet
Date:    2/10/97 7:54 PM


Alun Severn wrote:
> 
> Dear All,
> 
> Has anyone else noted the contradiction in GG's attitude to competition? He 
> loathed competitive behaviour and believed all forms of competition to be
> inherently corrupting; and yet, throughout his life, it is noted that he 
> played the stock market -- the prime expression of capitalist competition 
> -- extremely successfully....
> 
> Another Gould oddity.
> 
> Regards,   Alun
     
I believe GG's feelings about competition were specific to music.  My 
feeling is that Gould believed music was to exist for its own sake.  
Competition would take the focus off the music and put it on the 
musician.  The same was true for live performances which he also 
loathed. 
     
Gould recognized patterns.  He appreciated music most which contained 
complex patterns.  When he described the 12 tone system and music 
written with it, he seemed almost euphoric.
     
Perhaps the stock market offered another opportunity to observe 
patterns.  I have never understood the stock market or how it works, 
but it does seem to me those who are most successful at playing it are 
careful observers, just as Glenn Gould was.
     
Lori Lalonde