Re:Markets are efficient if and only if P=NP (2010)
by im3w1l on Wednesday October 21, 2020 @02:21AM
(#24845232)
I have a competing hypothesis. "Efficiently inefficient markets hypythesis". It says that alpha is possible, but that it takes a lot of work and smarts and that you may be better off working your dayjob than trying to beat the market unless you have comparative advantages.
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Re:Markets are efficient if and only if P=NP (2010)
by imtringued on Wednesday October 21, 2020 @05:03AM
(#24846019)
The thing is that there is a limited of value that the market generates. Like producing half a million tons of steel or something. If you extract more value than the market generates then you have to take that value from someone else who made a mistake. Therefore maximum upside by "beating the market" is limited by the amount of mistakes other people are making and that upside is much smaller than you get from simply taking market returns.