Stock prices fluctuate constantly. There are several reliable ways to mitigate stock price volatility: trading short-term gap price differences, buying and selling with momentum, or holding high-quality stocks for the long term until volatility averages out. When stock price movement is mathematically differentiated by time, the instantaneous price emerges—but humans cannot act in microseconds. In contrast, computers, with enhanced performance, can now trade at these speeds. Furthermore, by using artificial intelligence to analyze stock data, computers can reduce mistakes and trade algorithmically, unaffected by emotion. Still, even computers are limited if humans incorrectly input trading rules. Humans are not suboptimal investors due to a shortage of information or knowledge, but because they often fail to follow the necessary rules in each situation. - Joseph’s “just my thoughts”
Management is the activity of transforming uncertainty into certainty to create predictability . For example, investing in stocks when you don’t know when or how much you’ll make is a gamble , but finding a way to achieve an average return of 15% per month is management. Bank loans have a fixed schedule for when and how much principal and interest must be repaid. It is not the banking business where you can repay or request repayment at any time when you have funds. Nevertheless, we gamble or engage in a ritual for rain , mistakenly believing that it is management. - Joseph’s “just my thoughts”