3 ms·
A truly efficient market would anticipate the effect of taxes and window dressing by money managers, and arbitrage away any price differentials.
by panarky 12y ago
A truly efficient market would anticipate the effect of taxes and window dressing by money managers, and arbitrage away any price differentials.
- fredophile 12y agoThere are limits to arbitrage. Little players can't really move prices and big players are the ones causing the effect. I don't believe the market is efficient, especially short term. I believe that in the long term it is efficient-ish. Value strategies try to take advantage of mispricing from short term thinking but stocks can stay mispriced for a very long time.