Comments on: Study: Smart Investors MUCH Better Stock Pickers than Dumb Investors

By: Ideas To Make Money

Ideas To Make Money — Sat, 19 Jun 2010 18:57:52 +0000

I think with anything if you have too much knowledge it is good for you. Knowledge equals power and power means money.

By: Carnivals and Links, Week of December 20 – Don’t Quit Your Day Job

Carnivals and Links, Week of December 20 – Don’t Quit Your Day Job — Tue, 02 Feb 2010 07:09:12 +0000

[...] “Smart Investors MUCH Better Stock Pickers than Dumb Investors” – fun Christmas reading. It makes sense, too. [...]

By: Canadian Personal Finance Blog

Canadian Personal Finance Blog — Wed, 30 Dec 2009 06:54:56 +0000

Carnival of Money Stories: Happy Pseudo Boxing Day!…

Welcome to the Carnival of Money Stories, the End of Year and Pseudo Boxing Day Edition. Boxing Day was actually on Saturday, but most of us get the Monday off from our work, thus I view today as Pseudo-Boxing Day. Hopefully to counteract the orgy of p…

By: The Last Carnival of Personal Finance of the Year!

The Last Carnival of Personal Finance of the Year! — Mon, 28 Dec 2009 14:18:58 +0000

[...] from Darwin’s Finance presents Study: Smart Investors MUCH Better Stock Pickers than Dumb Investors , and says, “A surprising study sheds light on how investor IQ is correlated with actual [...]

By: Doctor Stock

Doctor Stock — Sat, 26 Dec 2009 04:48:51 +0000

Interesting… but I suppose it takes some of us a while to get there anyway. My PhD may not have been in finance, but it still works I suppose to qualify me. Nevertheless, investing takes work. Smarts or a disciplined work ethic… which is more important?

By: Matt SF

Matt SF — Thu, 24 Dec 2009 05:59:55 +0000

I suppose it makes sense that the smarter you are, the better your chances for outperforming the market will be. However, I would like to see the raw data and analyze if their IQ is the true dependent variable that makes the difference.

I would hypothesize that it’s not raw intelligence, but persistence in doing their due diligence or perhaps even amount of time spent researching an investment prior to buying in that is the real “separator” between those that beat the market versus those who rival or under perform their peers.

By: Ethan

Ethan — Wed, 23 Dec 2009 05:08:09 +0000

This is an interesting study. But doing better than lower-IQ investors doesn’t necessarily equate to beating indexes, as JoeTaxpayer points out. And as the study points out, smart decisions like lowering trading costs, picking funds with low expense ratios, and diversifying broadly and appropriately are all part of the habits of smarter investors. All three of these, of course, are things that indexers have been telling us are important for decades.

I’m not surprised that smarter investors are better at short-term trading, but I do doubt that this edge alone would allow high-IQ investors as a group to, say, outperform the indexes over a 30-year investing horizon.

By: JoeTaxpayer

JoeTaxpayer — Tue, 22 Dec 2009 18:28:12 +0000

Data suggests the average investor underperforms the market averages by a very very wide margin. If one reads a bit and understand this, then it’s a simple matter to beat the average investor (not the index average) ala Jack Bogle. If you separate investors into two haves, those above and those below the average, it’s not too surprising the IQ will average higher for the higher half.

By: Investor Junkie

Investor Junkie — Tue, 22 Dec 2009 18:05:20 +0000

At least with business (being an entrepreneur) I think it’s the reverse. I think there is an issue of being too smart. Smarter people tend to analyze things more and can become “deer in headlights” without taking action.