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> the market was pretty far down If you're an efficient-market believer, there's no such thing as a "down" market, because the price is always correct.
by xapata 3y ago
> the market was pretty far down
If you're an efficient-market believer, there's no such thing as a "down" market, because the price is always correct.
- kelnos 3y agoI think it's reasonable to believe in efficient markets, but also understand that pricing in markets is a) made up of imperfect information, and b) subject to outside influences like emotion, propaganda, etc.
- xapata 3y agoThose are inconsistent beliefs, if we're talking about Eugene Fama's hypothesis.
- Naga 3y agoJust like the rest of economics, the efficient market hypothesis is a nice model without any basis in reality. The fact that speculative bubbles exist should be enouh to disprove it.
- xapata 3y agoI guess that's the big question. Market behavior certainly can look like there are speculative bubbles, but Fama hypothesizes a different interpretation of the evidence. I'm not a believer, but there is some value in the thought.
- mrguyorama 3y agoIf you believe the efficient market hypothesis can actually apply to an existing stock market, I would like to offer you an incredible price to buy the Eiffel Tower! Hurry up! This offer is only valid for a few hours! People are lining up to get this offer