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

Re:An Infinite Regress. Of Dumb: More Reflections on “Market... by jsprogrammer on Monday March 16, 2015 @05:25PM (#9214503)

> the hypothesis that there is no information in the past history of share prices which can be used to predict the future

A belief in that hypothesis strikes me as particularly delusional. The strongest indicator of what a share price will be at `t+1` is what the share price is at `t+0`. Why would anyone delude themselves otherwise?

Maybe that would hold true if execution prices are never revealed (not even to the participants of a trade), but prices are streamed out constantly and are exactly what traders are interested in (how else can they measure their 'gains' and 'losses'?).

[ Parent | on HN ]

Re:An Infinite Regress. Of Dumb: More Reflections on “Market... by kpommerenke on Monday March 16, 2015 @11:49PM (#9216170)

A market is weak-form efficient if you cannot use past share prices to predict the direction of future price changes. Or in other words, if you can't use past returns to predict future returns. There's no delusion.

[ Parent | on HN ]

Re:An Infinite Regress. Of Dumb: More Reflections on “Market... by jsprogrammer on Tuesday March 17, 2015 @01:17AM (#9216394)

Direction of change is a bit different from future price and I don't believe was considered in this treatment.

[ Parent | on HN ]