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The efficient markets hypothesis seems Really Fucking Dumb™ to me. Like, trivially nonsense.
by p1necone 7y ago
The efficient markets hypothesis seems Really Fucking Dumb™ to me. Like, trivially nonsense.
- foldingmoney 7y agoThe EMH isn't necessarily that every stock is perfectly priced. It's that it's not possible to reliably predict where prices will go next.
- p1necone 7y agoBut isn't the hypothesis that it's not possible to predict because it's perfectly priced already?
- mruts 7y agoIf you see EMH as a general principle: all present information is incorporated in the price and all Sharpe ratios trend to the market Sharpe ratio, it makes more sense. No one actually believes in strong EMH, that is, it’s impossible to beat the market Sharpe ratio.