Re: Insider trading and market efficiency (was: Martha Stewart...)

From: I William Wiser (will@wiserlife.com)
Date: Mon Jun 16 2003 - 14:50:04 MDT

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    > I William Wiser wrote:
    > > Scientist figure out things other people
    > > do not know with information that is widely available to
    > > everyone. It seems like one could also figure out which
    > > companies are over or under valued by the market given sufficient
    > > diligence.
    >
    gts wrote:
    > One would think so. But when real scientists (not the pseudoscientists of
    > Wall Street) applied good science to the market they discovered that the
    > current market price of a stock reflects the best estimate of the
    company's
    > value on any given day, and that to the extent that the current price may
    be
    > in error, there was no evidence that any non-insider participants in the
    > market are able to capitalize on such errors consistently.

    Okay I find it hard to give up on the idea that people can find ways to
    out guess the market. But if we say it's about as hard as figuring out
    a unified field theory or a cure for AIDS that might give us good
    investment strategies while letting us keep our fantasies.

    --Will



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