I am not sure what studies you have read that show that no investment strategies outperform the market.
And if you think about that logically, the flipside is that no investment strategy UNDERPERFORMS the market (beyond that predicted by sheer chance). Now, I am sure I could come up with a strategy that underperforms the market. How about these two:
- 'Buy when the directors are selling on the market parcels of shares over $100K". I bet that would be found to underperform significantly! Or,
- 'Buy when the MD flees to a country without an extradiction treaty". I suspect that may also do worse than the average, to a statistically significant degree!
And for every dumb strategy that significantly UNDERPERFORMS (which is of course included in the total sample), there must be a strategy that significantly OUTPERFORMS.
Yes, I agree that there is a huge amount of randomness in market performance, especially over shorter time periods. Nassim Nicholas Talib's "Fooled by Randomness" and "The Black Swan" cover this as well as anybody.
But in terms of investment strategies that outperform the market, one obvious one springs to mind - BUY WHEN DIRECTORS BUY ON MARKET.
When directors buy on the market, the returns (across all markets where reporting on director purchases is required) have shown to outperform the market by a factor of two-to one. And apart from being empirically correct, it makes sense. Directors are more likely to have better information about their own companies.
Note that 3 HGO directors recently bought ABOVE market price in the 40 cent SPP.
They knew exactly the value of the offers that were rejected for the Kanmantoo JV, and also what other parties spoke to HGO about their ESG stake prior to the sale to Santos - and hence the likelihood of a large cash top-up).
So, they have an advantage over the market in terms of information.
If you want to believe all investments success is purely random, fine. But I have to disagree.
Y
(I bought HGO in the low teens. WHY? Because they were trading at a large discount to the value of just their ESG holding. With no value given to their cash, to their valuable copper mine, nor to their exploration, or plant and equipment.)
(Another outperforming strategy - When companies are bought way below their cash position, those companies strongly outperform the market.)
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5.8¢ |
Change
0.004(7.41%) |
Mkt cap ! $121.5M |
Open | High | Low | Value | Volume |
5.5¢ | 5.9¢ | 5.5¢ | $181.9K | 3.179M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 300000 | 5.8¢ |
Sellers (Offers)
Price($) | Vol. | No. |
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5.9¢ | 837996 | 4 |
View Market Depth
No. | Vol. | Price($) |
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1 | 300000 | 0.058 |
1 | 300000 | 0.057 |
1 | 110000 | 0.056 |
7 | 454100 | 0.055 |
4 | 353743 | 0.054 |
Price($) | Vol. | No. |
---|---|---|
0.059 | 837996 | 4 |
0.060 | 5048148 | 8 |
0.061 | 101460 | 3 |
0.062 | 140000 | 1 |
0.063 | 120829 | 1 |
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