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Economists would argue that it is impossible to pickup a $20 from the ground. After all if it was truly a free $20 sitting on the ground then someone else must
by Danieru 7y ago
Economists would argue that it is impossible to pickup a $20 from the ground. After all if it was truly a free $20 sitting on the ground then someone else must already picked it up. Thus any $20 sitting on the ground you see must instead be trap.
Part of my growing up has been to realize that sometimes that person picking up the $20 can be yourself. That perfect competition is a theory, and that the world is in fact always far away from that theory. Businesses can survive despite large in-perfections.
Trying to apply efficient market thesis to justify ignoring fundamentals while implicitly claiming growth is not efficiently priced is itself silly. To assume growth is being under priced during an era when all the hype and public attention goes to growth companies is silly.
Boring companies with strong fundamentals and good prices are the vehicles which will preserve wealth and return it to shareholders year in year out. The silly pumps into silly growth companies is the exact behavior marking the end times of a boom cycle.