Consequences of the Nobel Prize in Economics Are Vitally Important to All Serious Investors, Traders, Financial Advisers & Fund Managers.

1. Implications on Stock & Options Trading

2. Efficient Market Hypothesis
Investopedia
An investment theory that states it is impossible to "beat
the market" because stock market efficiency causes
existing share prices to always incorporate and reflect all
relevant information. According to the EMH, stocks
always trade at their fair value on stock exchanges,
making it impossible for investors to either purchase
undervalued stocks or sell stocks for inflated prices. As
such, it should be impossible to outperform the overall
market through expert stock selection or market timing,
and that the only way an investor can possibly obtain
higher returns is by purchasing riskier investments.

3. Recipients
This year’s prize in economic
sciences in memory of Alfred
Nobel was awarded to the
American economists Eugene
Fama, Lars Peter Hansen and
Robert Shiller. All three were
awarded the prize for their
work on the “empirical
analysis of asset prices”.
Lars
Hansen
Eugene
Fama
Peter
Shiller

4. Beating the Market with
Stocks
 Fama published his first research spelling out
the "efficient markets hypothesis" in 1970,
arguing that asset markets rapidly
incorporate most, if not all, information
about an asset into its price, making it nearly
impossible for mutual funds and other
investors to consistently beat the market.

5. Broad Market ETFs
 Their work resulted in the emergence of stock
index funds -- collections of assets designed
to mimic the results of broader stock indexes,
such as the Dow Jones Industrial. Such funds
are often staples of retirement and individual
investment accounts.

6. Alternate Strategies
 To succeed, we need to use strategies that
do not depend on information already
priced into assets.

7. Option Strategies
 Two strategies, independent of their
underlying asset’s pricing, produces higher
returns than the market.
 Market Neutral pair trades
 Discounted Cost Basis

8. Market Neutral
 Counter Condor
 An option pair trade of two inverse, leveraged ETFs
 Only relies on market movement
 Direction unimportant
 Youtube Video
 Counter Condor, the Ultimate in Market Neutrality

9. Discounted Cost Basis
 Cost Basis of Stock
 Equals Price of Stock
 Equals Trade Risk
 Discounted Cost Basis with Options
 Equals Price of Stock Minus Credit Received
 Risk Equals Reduced Cost Basis
 Always Smaller than Cost Basis of Stock
 Probability of Success
 Always Greater than with Stock
 PowerPoint
 Discounted Cost Basis

10. The Pairs Builder Plan
 Trade Small
 Never Risk More than 5% of your Equity on a Trade
 Trade with High Probability
 Youtube Video
 Credit Trades and the Probability of Trading Successfully
 [I’m TheOptionShepherd]
 Trade Frequently
 By Trading Small with High Probability you can afford
many trades per month
 Trade with Lower Risk
 Trade with High Return on Capital

11. 2013 Performance Trading
Only 5%/Trade
 Each month begins with
$100,000. A maximum of
5% [$5,000] is invested in
any trade. Profits are not
accumulated.

Each month’s performance
is calculated from actual
trades that expired by the
next month’s expiration
date. It shows the gain of
all trades expiring by
February’s expiration date.