Efficient Market Hypothesis
What does the Efficient-market hypothesis state?
Asset prices reflect all available information.
What is the implication of the Efficient-market hypothesis?
You shouldn’t expect to beat the market without a unique edge, except by chance.
How did Warren Buffet beat the market?
By running simple formulas over stock prices.
Why can you no longer use Warren Buffet’s method for beating the market?
The market became more efficient as everyone became aware of the edge.
References
- Kindly Stop Saying the Efficient Market Hypothesis is Dead, The Deep Dish