Comment by xrisk
1 day ago
Could you point me towards some resource that would help me understand what you wrote? Genuinely curious about how this stuff works
1 day ago
Could you point me towards some resource that would help me understand what you wrote? Genuinely curious about how this stuff works
https://en.wikipedia.org/wiki/Efficient-market_hypothesis might be a good start.
That's pure ideology and not empirical. There's you know, even a large section there in that article pointing that out
Step 2: https://en.wikipedia.org/wiki/Grossman%E2%80%93Stiglitz_para...
Yes, but I always found that objection a bit silly. It's like pointing out that real cows are obviously not perfect spheres nor do they live in a vacuum.
> [...] if prices perfectly reflected available information, there is no profit to gathering information, in which case there would be little reason to trade and markets would eventually collapse.[2]
That's a stupid way to formulate this. Markets wouldn't "collapse". They would get slightly less efficient until equilibrium is restored to where arbitragers can make enough money to keep prices at that level of efficiency.
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