Monday, June 01, 2020

Covid and evidence for/against the Efficient Market Hypothesis

https://www.bloomberg.com/opinion/articles/2020-06-01/stocks-are-trying-to-forget-2020

Why is the stock market doing so well?

"If in 2019 you built a stock-price model that projected out 100 years of income, you will have to adjust one or two columns for 2020 and 2021, but after that everything can stay exactly the same."

The market movement this year seems to support this simplistic hypothesis and refute "short term-ism" critique of market.


https://www.lesswrong.com/posts/utySCY9nJt9xGYGGQ/the-emh-aten-t-dead

Argues that just because some people could make some money "beating" the market doesn't mean that they didn't get lucky and apply flawed post hoc reasoning.

https://www.lesswrong.com/posts/tonKatiDTzTP8LrEk/zoom-technologies-inc-vs-the-efficient-markets-hypothesis

Argues that EMH needs to be restated, as market predicts the future value of the market, which could be totally "irrational" compared to the real world.

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