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My point is that people claim that the market has already priced in the next 6 months. This is not true.
by sjg007 7y ago
My point is that people claim that the market has already priced in the next 6 months. This is not true.
- ptero 7y agoNext 6 months includes a lot of uncertainty in expectations which is, statistically, priced in. Those expectations may have a distribution which might make for a strange average response. For example, consider a bimodal distribution: 50% +1, 50% -1. The average is zero, but everyone that believes in this distribution believes that zero is highly unlikely. Thus, if there are big benefit for guessing right and little for guessing zero, the actions can rapidly oscillate, seemingly without major external information (just based on whichever of two almost-equally-likely outcomes seems likelier).
- sjg007 7y agoStatistically priced in? Huh? I doubt that.