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People get tied up in knots about the Efficient Market Hypothesis. The factor that often gets ignored when approaching the problem is the costs factor. Trading
by bradshaw1965 15y ago
People get tied up in knots about the Efficient Market Hypothesis. The factor that often gets ignored when approaching the problem is the costs factor. Trading fees, Analysis, Commissions, etc. make it very hard in practicality to beat passive investment with the markets only being passably efficient.
- artsrc 15y agoI think that analysis ignores tax effects. To have a stable excess return you need some collection of people accept a stable lower return. This is possible if you have different tax regimes. Tax advantaged entities can accept coupons/dividends, and highly taxed entities want capital gains.