5 ms·
Do you believe it to be truly efficient or just the most effective hypothesis? For example perhaps where it is inefficient this is indistinguishable and highly
by adsyoung 18y ago
Do you believe it to be truly efficient or just the most effective hypothesis? For example perhaps where it is inefficient this is indistinguishable and highly random therefore not terribly useful?
- Femur 18y agoI do not believe it to be truly efficient as that would require perfect information for all parties that participate in the market. (discussion of that topic is here: http://en.wikipedia.org/wiki/Perfect_information http://en.wikipedia.org/wiki/Perfect_information) I do believe that it is efficient enough that the model works.
- adsyoung 18y agoIs there anyone who doesn't believe that it works though? i.e. It won't lead to a reasonable positive return? Believing that it works means simply accepting the average return of the market through index funds as you said, which sounds reasonable to me, but it is admitting defeat that you can't beat the market in the long run. Seems to me everyone would agree it works in general and the trouble starts when you try and do better than it. Is your reason for not looking for inefficiencies to exploit and do better the fact that it takes more time than you have to devote to it, don't believe its possible in the long run (i.e. largely luck), you require some special insight other people don't have, other?