http://www.businessinsider.com/money-cheat-sheet-2014-4C) WELL, WHO MAKES MONEY IN THE MARKET THEN?
Three types of people:
1) People who hold stocks FOREVER. Think: Warren Buffett (has never sold a share of Berkshire Hathaway since 1967) or Bill Gates (he sells shares but for 20 years basically held onto his MSFT stock).
2) People who hold stocks for a millionth of a second (see Michael Lewis's book "Flash Boys" which I highly recommend.) This is borderline illegal and I don't recommend it.
3) People who cheat.
I've seen it for 20 years. I've seen every scam. I can write a history of scams in the past 20 years.
Without describing them, here's the history: Reg S, Calendar trading, Mutual fund timing, Death spirals, Front running, Pump and Dump, manipulating illiquid stocks, Ponzi schemes, and inside information. Inside information has always existed and always will exist.
One time I wanted to raise money for one of my funds. I went to visit my neighbor's boss. The boss had been returning a solid 12% per year for 20 years.
Everyone wanted to know how he did it. "Get some info while you are there," a friend of mine in the business said when he heard I was visiting my neighbor's boss.
The boss said to me, "I'm sorry, James. We like you and if you want to work here, then that would be great. But we have no idea what you would be doing with the money. And here at Bernard Madoff Securities, reputation is everything".
So I didn't raise money from Bernie Madoff although he wanted me to work there.
Later, the same friend who wanted me to get "info" and "figure out how he does it" said to me: "we knew all along he was a crook."
Which is another thing common in Wall Street. Everybody knows everything in retrospect and nobody ever admits they were wrong.
Show me a Wall Street pundit who says "I was wrong" and I'll show you...I don't know...something graphic and horrible and impossible [fill in blank].
Read more:
http://www.businessinsider.com/money-cheat-sheet-2014-4#ixzz2yaGlOVFk