
When researchers recently gave professional traders advanced knowledge in what they call the Crystal Ball Challenge, you'd think with that information they'd significantly outperform the markets. Think again. This is a great experiment, and I thought it was very relevant for a short video. The experimenters gave the traders advanced knowledge of a move. A good example would be the recent interest rate cut. They gave them advanced knowledge of what the move was, but they didn't tell them how significant the move would be. Again, in this case, would it be a quarter-point move or a half-point move? Despite the advanced knowledge, the best traders got their bets right just 63% of the time, and they were top-tier investors. The vast majority actually took pretty bad hits on their investments. This is very important and leads to some pretty interesting insights that I always try to make sure my...
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