A Quote by George Soros
I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them.
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AIG's failure revealed systemic problems in the OTC derivatives market that went well beyond the failure of a single market participant.
I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality.
Value investing is predicated on the efficient market hypothesis being wrong.
The study of economic organization commonly proceeds as though market and administrative modes of organization were disjunct. Market organization is the province of economists. Internal organization is the concern of organization theory specialist. And never the twain shall meet.
The free market doesn't exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them.
A theory's assumptions always are and ought to be unrealistic. Further, we should attempt to make them more unrealistic in order to increase a theory's fruitfulness.
The efficient market theory is one of the better models in the sense that it can be taken as true for every purpose I can think of. For investment purposes, there are very few investors that shouldn't behave as if markets are totally efficient.
The sad truth is that it is precisely those who disagree most with the hypothesis of efficient market pricing of stocks, those who pooh-pooh beta analysis and all that, who are least able to understand the analysis needed to test that hypothesis.
As a bull market turns into a bear market, the new pros turn into optimists, hoping and praying the bear market will become a bull and save them. But as the market remains bearish, the optimists become pessimists, quit the profession, and return to their day jobs. This is when the real professional investors re-enter the market.
I am the largest market shareholder of clothing in the U.K. and I am not a destination shop for food. If the clothing market is affected - and it has been - and I hold my market share mathematically, then fine, I am doing no worse than the market is doing, which is exactly the case, but I'm losing revenue.
I am the largest market shareholder of clothing in the UK and I am not a destination shop for food. If the clothing market is affected - and it has been - and I hold my market share mathematically, then fine, I am doing no worse than the market is doing, which is exactly the case, but I'm losing revenue.
If I subscribed to the efficient market theory I would still be delivering papers
I like the PC market. It's a big market, but it's a very volatile market as well.
Tech stocks were the cubic zirconium of the market. They looked good and were sexy, but they just were a way for the company selling them to make money. That's always going to be transient in terms of the stock market. What's real is that companies have to compete. Technology used well is a great tool to enable that if only because most companies dont use technologies well.
Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them.
That was how a Salomon bond trader thought: He forgot whatever it was that he wanted to do for a minute and put his finger on the pulse of the market. If the market felt fidgety, if people were scared or desperate, he herded them like sheep into a corner, then made them pay for their uncertainty. He sat on the market until it puked gold coins. Then he worried about what he wanted to do.
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