Essay on Qwsd Da

Essay on Qwsd Da Essay on Qwsd Da Revision Date: August 29, 2007 M ART IA L C A P I TA L W H I T E PA P E R : WH AT ABO UT THE E F F I C I E N T M A RK ET H Y P OTHE SI S? www.martialcapital.com Those who believe in the Efficient Market Hypothesis, which includes the vast majority of professional investors worldwide, will say that it is impossible to sustain the kinds of returns Martial Funds has demonstrated in our backtest and in our short period of live investing. This White Paper talks about their concerns and our response. The Efficient Market Hypothesis, developed by Prof. Eugene Fama at the University of Chicago in the early 1960s, says that everything that can be known about a stock has already been incorporated into the price of that stock. From this hypothesis have come many of the theories that we use to explain the financial markets: the arbitrage principles of Miller and Modigliani, the portfolio principles of Markowitz, the Capital Asset Pricing Model of Sharpe, Lintner, and Black, and the Option-Pricing Model that won for Black, Sholes, and Merton the Nobel Prize. Investment professionals globally have embraced the Efficient Market Hypothesis. It is taught thr oughout the world in schools and in CFA licensing courses. It is used in particular by investment managers to explain their almost-index performance to their clients. Virtually all of current day financial theory is based in one form or another on the Efficient Market Hypothesis. The most important consequence of this hypothesis (for this discussion) is that it is not possible to outperform the market (adjusted for risk) over the long term. Random chance may allow a specific portfolio (a fund or privately-managed account) to do better in one year than the index, perhaps much better, but random chance will smile on some other portfolio manager next year so that over the long term, the hypothesis says, no managed fund can do better than the market. Our reply is two fold:  Look at the assumptions underlying the Efficient Market Hypothesis and judge for yourself if they are reasonable, and  Look at our results. Page 1 Â © 2007 Martial Capital Ltd. Reproduction in whole or part without written permission is prohibited. Revision Date: August 29, 2007 www.martialcapital.com WHAT A BOU T T H E E FFI C I E NT MAR KET HY PO THESI S? Among the assumptions the Efficient Market Hypothesis makes are:  Investors are rational.  Markets are rational.  There are no taxes – or, more specifically, taxes play no part in financial decision-making.  There are no transaction costs.  An investor is indifferent between a dollar in dividends and a dollar in capital gains.  A company (and its investors) are indifferent between a dolar of aditional debt and a dollar of additional equity. The list is much longer, but you get the point. Our second argument is straightforward: How long does a fund have to convincingly beat the index before a follower of the EMH agrees that someone has proved they can beat the market? Between 1977 and 1990 – 13 years – Peter Lynch at the Magellan Fund achieved an average annual return of 29% after fees and expenses1. Is that not an example of a fund having convincingly beaten the market? The biggest problem for advocates of the Efficient Market Hypotheses is that many funds have proven they can outperform the market. Peter Lynch at Fidelity. The Harvard and Yale Endowment Funds. Warren Buffet. Our own Martial Funds have (with our backtest period plus our live experience) beaten the market every year since 1990 in the case of our Canadian portfolio, and every year since 1998 in our US portfolio. This could not be possible if the Efficient Market Hypothesis was true. To reconcile this paradox let us look more closely at the academic studies that prove that no managed fund can beat the market over the long term. The essence of their argument is that there never has been such a fund. These studies show that the results of all managed funds looks more like a

Latin Words and Expressions in English

Latin Words and Expressions in English Why Learn About Latin Words and Expressions in English?: Some excellent reasons you might want to know more about Latin words and expressions in English are: Youre studying for a vocabulary/admissions test.Youre a non-native English speaker puzzled by the vocabulary.Youre developing a character for a novel.You need a new word for a specific technical purpose.You are a stickler for language purity and dont want to create a hybrid word inadvertently. [See this polyamory t-shirt for more information.] The Latin Connection With English: Its confusing to hear that English doesnt come from Latin because there are so many Latin words and expressions in English, but vocabulary is not enough to make one language the daughter language of another. Romance languages, including French, Italian, and Spanish, come from Latin, an important sub-branch of the Italic branch of the Indo-European tree. The Romance languages are sometimes called daughter languages of Latin. English is a Germanic language, not a Romance or Italic language. The Germanic languages are on a different branch from the Italic. Just because our English language doesnt come from Latin doesnt mean all our words have a Germanic origin. Clearly, some words and expressions are Latin, like ad hoc. Others, e.g., habitat, circulate so freely that were not aware theyre Latin. Some came into English when Francophone Normans invaded Britain in 1066. Others, borrowed from Latin, have been modified. Latin TranslationA Biography of LatinThe Spread of LatinIndo-European Languages Latin Words in English: There are many Latin words in English. Some are more obvious than others because they are italicized. Others are used with nothing to set them apart as imported from Latin. You may not even be aware theyre Latin, like veto or etc. Latin Words in EnglishMore Latin Words in EnglishLatin Adjectives in EnglishLatin and Greek Geometry TermsLatin Religious Words in English Latin Words Incorporated in English Words: In addition to what we call borrowing (although there is no plan to return the borrowed words), Latin is used to form English words. Often English words contain a Latin word as a prefix. These Latin words are most often Latin prepositions. Many Latin words come into English with the preposition already attached to the verb. Sometimes the ending is changed to suit the needs of English; for instance, the verb may be converted to a noun. English Words With Latin PrepositionsGreek and Latin Prefixes and Suffixes For English WordsLatin Color WordsBorrowed Words Latin Sayings in English: Some of these sayings are familiar in translation; others in their original Latin (or Greek). Most of them are profound and worth remembering (in either the classical or modern language). Latin Sayings in EnglishAncient Proverbs in Pictures More - Words and Ideas: Words and Ideas, edited by William J. Dominik, contains word-building techniques for those who want to learn how to combine bits of Latin or Greek to form proper words in English or for those interested in the meaning of those word components. Latin Grammar in English: Since English doesnt come from Latin it follows that the internal structure or grammar of English is different from Latin. But English grammar as it is taught in classes on grammar is based on Latin grammar. As a result, some official rules make limited or no sense. One that is familiar, in its violation, from the Star Trek series, is the rule against a split infinitive. The Star Trek sentence contains the split infinitive to boldly go. Such a construction simply cant happen in Latin, but is obviously easy to do in English, and it works. See William Harris on how we wound up with the Latin grammar albatross.