Zero Intelligence Trading Strategy: Not sure I'm convinced yet.

There is a concept called zero-intelligence stock trading that seems to reflect the constraints of the system and is about as effective as many other strategies. Before you get excited, the term zero-intelligence doesn't mean there is no strategy. It means that one is placing stock market bids randomly but if they can sell it for a profit they do so (wherever they put that %) and if they cannot sell it for a profit, they will hang onto it. You can read 0-Intelligence Stock Trading

To me if this strategy provides diversification of a portfolio and seems to be just as effective as other strategies, one might consider ensuring a certain percentage are picked randomly ( i.e. 30% or 10% are randomized). The random strategy would force diversification and possibly reduce volitity and bubbles within the portfolio.

I do believe there is a pretty big difference between those who watch the market and gain knowledge, utilize high quality systems to analyze options, etc. versus those who pick stocks based on strategies that are not really time tested. In such cases, randomization would seem just as attractive because average stock performance has general gone up. If you hang onto stocks long enough generally the market increases throughout history---so far!

For now, the strategy I am using is to actively pick stocks based on broader market trends and then holding them for mid-term seems to make some sense. I'm trying to pick exclusively American stocks and/or companies that have a significant footprint in our nation/area as well as capable of hedging industry development. My current portfolio is 34% up. Some bounced from 90% to 0% over the past year but that is reflective of general market volatility. It would seem like my general hedging strategy worked.

Keep in mind I'm looking at a cluster concept and whether or not stocks invested in anchor businesses have a level of stability. Likewise if stocks invested in newly emerging companies that feed those anchor businesses could be of benefit for industry development and faster portfolio growth i.e. pack investing. On a localized scale it might be investment in anchor industries and investment in start-ups that fill cluster needs (A long extentiono f Schumpeter's Creative Destruction, Adam Smith's The Wealth of Nations and a touch of Keynesian government-industry). 

I'm not a stock broker and you should not take your stock advice from me. You may find this study interesting. Trading strategies and Financial Performances: A simulation approach