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]]>Perhaps part of the issue is choice of broker. I use Fidelity and find the lack of transparency on the bid/ask very problematic. One of their reps even told me that the bid/ask online is not accurate and I should call in to obtain accurate data.

Anyway, very interesting post. Thanks.

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]]>I spend most of my limited time translating what I’ve learned in finance, accounting, and business into automated data mining solutions. But what is interesting and I strongly disagree with was Seth Klarman’s response to searching for an investment formula. In his book Margin of Safety he wrote the following

“Many investors greedily persist in the investment world’s version of a search for the holy grail: the attempt to find a successful investment formula. Given the complexities of the investment process, it is perhaps natural for people to feel that only a formula could lead to investment success.

The financial markets are far too complex to be incorporated into a formula. Moreover, if any successful investment formula could be devised, I would be exploited by those who possessed it until competition eliminated the excess profits. The quest for a formula that worked would then begin anew.

Investors would be much better off to redirect the time and effort committed to devising formulas into fundamental analysis of specific investment opportunities.”

I’m sure Joel Greenblatt would have a different take on formula investing.

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