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>The fact that the information is not real is immaterial to the EMH in any of its forms. Hmm, really? I guess I really don't understand the EMH then. Can you g
by jsprogrammer 11y ago
>The fact that the information is not real is immaterial to the EMH in any of its forms.
Hmm, really? I guess I really don't understand the EMH then. Can you give me a formulation of EMH that doesn't depend on information?
I tend to think that the EMH is a tautology and makes no real claims. It's a novelty.
Back to our argument though, you're still disregarding the sequence of events. The reputation of the information precedes the information itself. It was possible to know to disregard the content before actually seeing the content.
You keep claiming that the content came first, when that is strictly not the case.
I will accept that many traders treat any text they come across as gospel and blindly follow it. I'm sure there's a continuum to someone who first verifies all information they depend on in a trade.
- kasey_junk 11y agoI'm not making myself clear. The EMH does require information for any of its formulations. It doesn't require the market to magically determine what is "real" vs "fake" information and disregard "fake" information. In fact quite the opposite. The EMH is based on the idea that lots of people react to incorrect information all the time, but that just as many are working on correct information such that the aggregate is efficient. That is precisely what happened here. Some people reacted incorrectly to new information (ie they believed it) others reacted correctly (ie they saw it was nonsense) and the market in aggregate self corrected. I'm not sure that the correction falls into the semi-strong form as I'm not sure what the boundaries for speed of market reaction are. I think it is smart to be skeptical of the EMH, lots of people are for very good reasons, but this event is not evidence one way or the other.