Stock
pickers are exactly what their name implies
- active investors who pick stocks or even mutual
funds based on perceived mismatches between
the current market prices and their supposed
true values. This is a major problem. In this
random and efficient market, there are no mismatches
between the current market prices and their
true value. Stock pickers are listening to their
feelings and instincts when deciding what stock
to pick.
Step 3 : Program Overview
Stock
pickers are active investors who bet they
can beat a market by picking stocks they
believe will outperform an index. To be
precise, the only proper comparison to their
result is the portfolio they choose. All
other portfolios will end up with different
risk and return characteristics.
