I'm not sure Berkshire Hathaway is comparable to anything in the crypto sphere.

Parent was referring to French (2008). Bitcoin was created in 2009, so the whole crypto sphere didn't exist in 2008. The reference was in relation to stock markets (and also to some extent derivative markets and bond markets etc.). Berkshire Hathaway is a good example of how stock markets are not efficient.

What exactly turned out to be false?

Efficient markets hypothesis in the context of stock and derivatives markets.

Has it been disproven? As far as I know the best performing model of stock returns is the Fama-French 5-factor model which assumes efficient markets.

You can look at the consistently outsized returns of Renaissance's Medallion fund and Buffet's Berkshire Hathaway. Those returns aren't explainable with "1000 monkeys and a typewriter". (Or, they are if you add a sigma every few years.)

There are anomalies that we don't know how to fully explain yet, the question is: is the efficient market hypothesis more consistent with what we observe than the alternative hypothesis? And the answer is yes.

You have a theory that says "black sheep don't exist". I show you 2 black sheep. Your counter is that "There are anomalies that we don't know how to fully explain yet" and that you'll keep holding onto your belief that black sheep don't exist. Because it's "more consistent with what we observe", despite the fact that you just observed 2 black sheep, you know, existing.

The theory doesn't say beating the market is impossible. It says is should be relatively rare.

Wikipedia top-line sentence disagrees with you regarding what the theory says:

> The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.

But anyway, it sounds like we agree on the main point: relatively few individuals are able to consistently beat the market.

1. The Medallion Fund went insider-only 17+ years ago. The best explanation for their performance - assuming it's legitimate, since the fund itself isn't audited - is that they use an extreme amount of leverage to multiply "safe" returns. Of course, it's much more likely that the information being leaked to WSJ is a marketing ploy to keep investors in Renaissance's two publicly available funds, both of which greatly underperform the S&P 500

2. BRK is dead even with the S&P 500 over the last decade. This is despite the fact that BRK has access to cheap/nearly free leverage

There are better examples out there if you want to critique EMH.

The original point still stands. The vast, vast majority of professional investors (let alone retail investors) underperform the market. Almost everyone who promises safe alpha is full of it.

> There are better examples out there if you want to critique EMH.

I'm curious. Can you give some links, please?

> The original point still stands. The vast, vast majority of professional investors (let alone retail investors) underperform the market. Almost everyone who promises safe alpha is full of it.

EMH claims that nobody can consistently beat the market in terms of risk-adjusted returns. Yes, almost everybody who promises safe alpha is wrong. That's self-evident from the fact that the stock markets are mainly professionals trading against other professionals. If one professional makes money with a good trade, there is (most often) another professional at the other end of that trade. Obviously you can't have a negative-sum game and then have the majority of players making positive returns - it wouldn't be negative-sum in the first place if that were possible!