Focus on stocks => beat the market?
The efficient markets theory suggests that there are so many players and so much information available that the price that is determined for each security is correct because it takes into account not only past and current attributes, but also future projections. According to this theory, it would therefore be impossible to beat the market, because it would not contain anomalies (undervalued or overvalued securities).
If this were really the case, how can we explain that Graham and his descendants, notably Buffett and Munger, managed to do it over a very long period? How can we also explain that a tech bubble was able to be created in 2000, then that we witnessed a complete washout of stocks for 3 years, then that a new bubble was recreated just after, before it burst even more beautifully. With each burst, we could pick up nuggets at knockdown prices. If the market were really efficient, this would not happen. And apparently new information technologies, and the abundance of data that goes with them, have not improved the situation, quite the contrary.
What is certain, and logical, is that there cannot be a single method that would allow you to beat the market. If there were, everyone would use it and the market would therefore adapt accordingly (in this case it would be "efficient"). There are, however, general principles that everyone must adopt and adapt according to their personality, their means and their knowledge.
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Regarding this famous theory of market efficiency, there is this famous speech given by Warren Buffet at Columbia University in 1984:
https://www.tilsonfunds.com/superinvestors.pdf
For my part, I try above all to reach my own objectives rather than trying to beat "the market". I ask for nothing more than to be able to live one day from my dividends 🙂
By the way, we look forward to reading your next series of articles on Warren!
It's just that the important thing is first to have an investment philosophy that allows you to achieve your goals and that matches your personality. You will notice that it is by proceeding in this way that you can beat the market. It is therefore not a primary objective but a happy consequence. I will come back to this point in the rest of this series of articles.