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I agree that efficiency depends on time frame, but I believe that the market will always be more efficient as the time-frame grows. A market is not zero sum.

I agree that efficiency depends on time frame, but I believe that the market will always be more efficient as the time-frame grows. A market is not zero sum. Investors with long-term horizons don't have to beat the market to make money, because wealth is created. "Since short-term traders contribute more heavily to efficient markets than long-term value investors, it's plausible that long-run investors can make expectancy in excess of the market average." Why do you think short-term investors create more efficiency than long-term investors?

anamax 18y ago
> I believe that the market will always be more efficient as the time-frame grows. A market is not zero sum. Investors with long-term horizons don't have to beat the market to make money, because wealth is created. Even if markets do become more efficent as time-frame grows, that's irrelevant because different people consume wealth at different times (a 20 year old saving for retirement in her 50s will consume that wealth at a different time than a 20 year old saving to buy a house in 5 years), they don't know when they'll consume wealth (the first 20 year old above decided when she was 25 that she really did want kids), and wealth creation over time not only isnt uniform, it isn't known. (The US thinks that it is worth a couple of trillion less today than it thought a year ago. It probably is, but no one knows the actual number at either end-point. Germany, France, and the UK lost a lot of wealth between 1938 and 1943.)