Comments on: What is the Efficient Market Hypothesis?

By: AJ Cartwood

AJ Cartwood — Sat, 02 Feb 2008 21:19:35 +0000

I agree with Clint … MOST fund managers do WORSE than the market. Warren Buffet says that most investors should simply invest in index funds.

Here’s the rub: Warren Buffet does NOT invest in index funds because he doesn’t believe in the Efficient Market Theory. Value investors like Warren Buffet look for stocks that are currently UNDER PRICED.

How can this be so if the market is ‘efficient’? There is a great book that tells you why & shows you how to find them and invest in them … just like Warren (Rule #1 Investing by Phil Town).

AJC – http://7million7years.com/

By: The Dow Theory

The Dow Theory — Wed, 13 Jun 2007 06:15:12 +0000

[...] Stock prices quickly incorporate new information as soon as it becomes available. Once news is released, stock prices will change to reflect this new information. On this point, Dow Theory agrees with one of the premises of the efficient market hypothesis. [...]

By: Clint

Clint — Sun, 01 Oct 2006 14:37:30 +0000

Mike – I’m not sure exactly what you mean. Fund managers do not “usually beat the market”. My point was that there are some (very few) that have been able to it consistently. And given the large amount of fund managers, this is statistically to be expected.

By: Mike

Mike — Sun, 01 Oct 2006 10:24:23 +0000

“Though fund managers have consistently beaten the market”
That is a common misconception.
Usually beat hte market would be a beter phrasing.