From: gts (gts_2000@yahoo.com)
Date: Sun Jun 15 2003 - 21:18:29 MDT
Rafal Smigrodzki wrote:
> Relevant public information becomes discounted by the market only
> after the "vast majority of people" start trusting it - either because
> they understand their relevance or because the people they trust do.
> If you are faster to understand the information...
Again, that's the theory. You are not the first to think of it, Rafal. I
agree it is not unreasonable. Belief in your theory is what motivates
millions of intelligent stock traders to devote time and energy to beating
the market. Unfortunately there is no evidence to support the theory. The
theory is no more substantiated than the theory of astrology.
By the way, communist and socialist economists agree completely with you
that the current market price of an asset, as determined by the forces of
supply and demand acting on that asset in a free market, should not be
trusted as the most accurate method of estimating the asset's real intrinsic
value. Like you they believe it is possible to know more about the asset's
real worth than is reflected in the free market price. That is why they
advocate central economic planning.
-gts
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