4 ms·
That's not what efficiency means in this context. People who say the market is efficient mean one of: - You can't beat the market - You can't beat the market
by consilient 3y ago
That's not what efficiency means in this context. People who say the market is efficient mean one of:
- You can't beat the market
- You can't beat the market without insider information
- You can't beat the market using only information about historical prices.
(Insert "approximately" and "by enough to be worth it" as appropriate)
1 is certainly false, 3 is probably true, 2 is controversial.
- Dylan16807 3y agoYeah, I know, but they quoted that one so I used it. The paper is basically proving 3 can't always be true for actors with unlimited computational power, and without any "approximately" or "by enough to be worth it". It's a cute math trick, not something useful.
- cosmojg 3y agoYou hit the nail on the head, thank you. I probably should have qualified my use of the word "efficient" with "highly" or even "incredibly" to make this more obvious.
- Dylan16807 3y agoThe paper doesn't prove you can't be highly efficient in real markets. It proves you can't be perfect.