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Isn't that the efficient market hypothesis ? Which, when you read it, I'm sure you can come up with 10 counterexamples (obvious counterexample: ponzi schemes).
by waps 13y ago
Isn't that the efficient market hypothesis ?
Which, when you read it, I'm sure you can come up with 10 counterexamples (obvious counterexample: ponzi schemes). I guess you could call me a disbeliever.
- pyrrhotech 13y agoValue is what the market is willing to pay for it--for anything, not just companies. The EMH says that that value is always discounted perfectly on a risk-adjusted basis of all current knowledge about the company. Therefore if a company exceeds its risk adjusted expected performance in the future, it wouldn't be possible to predict beforehand.