An Infinite Regress. Of Dumb: More Reflections on “Market Efficiency”

Re:An Infinite Regress. Of Dumb: More Reflections on “Market... by bradleyjg on Monday March 16, 2015 @04:27PM (#9214150)

About three quarters of the way down, the author draws these conclusions from a classic 1980 paper:

  - there is smart money in the market,
  - the smart money can and is outperforming right now, but that smart money isn't YOU,
  - so sit down and index.

I don't mean to be anti-intellectual, the various versions of the EMH and the responses to them are interesting, important concerns in the study of finance and economics. But the take away for the vast majority of the public should be the above. The market may or may not be efficient but you aren't going to beat it. And even if someone else can, he isn't going to use that ability for your benefit.

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Re:An Infinite Regress. Of Dumb: More Reflections on “Market... by meric on Monday March 16, 2015 @11:51PM (#9216173)

I think what it means any money can be "smart money"[1], but over a longer horizon, no money can be consistently smart.

[1] If you work in a company you're well placed than most in judging the value of the company. Yes there are regulations to prevent you from insider trading, but no it doesn't mean you can't invest in the company (or short it!) on the basis you know your colleagues better than others. You, however, have no advantage over the market over all other forms of investment.

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