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Fama himself proposed the efficient markets hypothesis, to some acclaim: EMH is the closest finance has to a “theory of everything”, and won Fama the Nobel Pri

Fama himself proposed the efficient markets hypothesis, to some acclaim: EMH is the closest finance has to a “theory of everything”, and won Fama the Nobel Prize for Economics in 2013. But it remains as controversial today as it did when Fama first proposed it half a century ago. (From TFA.) The fact that the hypothesis's own formulator and presumably chief cheerleader now has his doubts is worthy of comment.

yzydserd 2y ago
Because "now has his doubts" adds a temporal change that's incorrect. There is nothing in the article that says he's "now" had a suddent shift. He has formed no new "doubts". Fama has always made the distinction that it's a hypothesis, not reality. e.g. 'I start my class every year by saying, “These are models. And the reason we call them models is that they’re not 100 percent true. If they were, we would call them reality, not models'. https://www.minneapolisfed.org/article/2007/interview-with-eugene-fama https://www.minneapolisfed.org/article/2007/interview-with-e... So I agree with the GP, "I don’t know why Eugene Fama saying this in 2024 is considered news."
- dredmorbius 2y ago
  The context of the headline is a current interview with Fama, and the fact that the conversation focuses largely on EMH. Which makes litigating of the title tedious, and failing to fullfil HN's objective of satisfying intellectual curiosity. Dang explains this (in a somewhat different context, but otherwise relevantly) here: <https://news.ycombinator.com/item?id=39237551 https://news.ycombinator.com/item?id=39237551>
em500 2y ago
Fama's actual position was of course more nuanced than simply declaring that "markets are efficient". His key EMH paper [1] notes that a generic formulation of the EMH, that security prices at any time "fully reflect" all available information is untestable: you need narrow down the information set and the pathways in which they are reflected in prices. The paper goes over various technical definitions of "efficiency" and concludes from reviewing the empirical literature (in 1970) that no evidence against certain formulations (weak, semi-strong) of the EMH has been found/published. I don't think it's fair to characterize Fama as "chief cheerleader" of the EMH, but the papers are there for the readers to judge for themselves. [1] https://www.jstor.org/stable/2325486 https://www.jstor.org/stable/2325486, http://efinance.org.cn/cn/fm/Efficient%20Capital%20Markets%20A%20Review%20of%20Theory%20and%20Empirical%20Work.pdf http://efinance.org.cn/cn/fm/Efficient%20Capital%20Markets%2...

yzydserd 2y ago

Because "now has his doubts" adds a temporal change that's incorrect. There is nothing in the article that says he's "now" had a suddent shift. He has formed no new "doubts". Fama has always made the distinction that it's a hypothesis, not reality. e.g. 'I start my class every year by saying, “These are models. And the reason we call them models is that they’re not 100 percent true. If they were, we would call them reality, not models'. https://www.minneapolisfed.org/article/2007/interview-with-eugene-fama https://www.minneapolisfed.org/article/2007/interview-with-e... So I agree with the GP, "I don’t know why Eugene Fama saying this in 2024 is considered news."

dredmorbius 2y ago
The context of the headline is a current interview with Fama, and the fact that the conversation focuses largely on EMH. Which makes litigating of the title tedious, and failing to fullfil HN's objective of satisfying intellectual curiosity. Dang explains this (in a somewhat different context, but otherwise relevantly) here: <https://news.ycombinator.com/item?id=39237551 https://news.ycombinator.com/item?id=39237551>

em500 2y ago

Fama's actual position was of course more nuanced than simply declaring that "markets are efficient". His key EMH paper [1] notes that a generic formulation of the EMH, that security prices at any time "fully reflect" all available information is untestable: you need narrow down the information set and the pathways in which they are reflected in prices. The paper goes over various technical definitions of "efficiency" and concludes from reviewing the empirical literature (in 1970) that no evidence against certain formulations (weak, semi-strong) of the EMH has been found/published. I don't think it's fair to characterize Fama as "chief cheerleader" of the EMH, but the papers are there for the readers to judge for themselves. [1] https://www.jstor.org/stable/2325486 https://www.jstor.org/stable/2325486, http://efinance.org.cn/cn/fm/Efficient%20Capital%20Markets%20A%20Review%20of%20Theory%20and%20Empirical%20Work.pdf http://efinance.org.cn/cn/fm/Efficient%20Capital%20Markets%2...