Ann: Change in substantial holding, page-17

"I notice you hold RIO I think MSB will outperform RIO easily this year we'll revisit this later in the year to find out who's right"

Ah, yes, individuals pitting their investing skills against one another.

Just a few things to consider, though:

In order to isolate the true causality of the performance of MSB's share privce versus that of RIO's, how are we going to isolate mere luck from the respective outcomes?

An, more importantly, how are we going to risk-adjust whatever returns each stock generates over the competition period?


Here's an idea: if you haven't already, why don't you read Taleb's "Fooled By Randomness: The Hidden Role of Chance in Life and Markets"? The chapter involving possible alternate histories is particularly prescient to a contest such as the one you are proposing.

It deals with the notion that while market returns on two given investments might be equal in quantum, they might be distinctly unequal in their respective nature.

For example, do you think that a percentage return from an investment in CBA can considered the same as a percentage point return from an investment in an exploration company? Do you not concede that these respective returns have different risk characteristics associated with them?

This is a fundamental concept that is critically important to sustainable wealth creation, and yet it is one that almost no investors are even aware of, let alone heed.

Let me know what you think of my enhancements for your proposed "competition".