Economics

Keynes said picking stocks is like judging a beauty contest by guessing others' votes

In 1936, Keynes compared professional investing to a newspaper contest where readers pick the six prettiest faces from a hundred photos, and the winner matches the average vote. The smart strategy isn't picking who you find prettiest, it's guessing who everyone else will guess is prettiest. Keynes argued stock prices often move the same way, driven by guesses about other investors' guesses rather than a company's actual value.

John Maynard Keynes, Keynesian beauty contest — The General Theory of Employment, Interest and Money, ch. 12, 1936

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