EMH is a model and all models are wrong but some of them are useful. I seriously doubt EMH is being taught as gospel anywhere but if it were so obviously wrong, we would see lots of people beating the market and we don't. As a first-order approximation, it certainly looks true (the weak form).
On Thu, Jul 25, 2019 at 12:48 PM Raul Miller <[email protected]> wrote: > https://arxiv.org/pdf/1002.2284.pdf > > On Thu, Jul 25, 2019 at 12:30 PM Devon McCormick <[email protected]> > wrote: > > I think Dan Bron sent this paper to the forum a few years ago. The > author > > errs in fixating on the "past prices can predict future prices" part of > > refuting EMH but this is patently false: the Japanese stock market did > not > > tank in the wake of the Fukushima disaster because of its price history. > > It was affected by external, non-price information. > > That's not the issue. > > The issue is *not* that "markets can't get thing anything right". > > The issue is that "markets can't get everything right". > > Stated this way, it should be obvious, of course. But many > universities were still teaching the efficient market hypothesis (and > grading papers so that you had to agree with it to get good grades in > economics). > > -- > Raul > ---------------------------------------------------------------------- > For information about J forums see http://www.jsoftware.com/forums.htm > -- Devon McCormick, CFA Quantitative Consultant ---------------------------------------------------------------------- For information about J forums see http://www.jsoftware.com/forums.htm
