From: gts (gts_2000@yahoo.com)
Date: Wed Jun 11 2003 - 12:54:18 MDT
Hal Finney wrote:
> According to the efficient market theory, there are really no
> such things as bull and bear markets. They are optical illusions.
Exactly.
And the efficient market hypothesis (EMH) is a true theory. The statistical
evidence for EMH is overwhelming.
In my former life as an investment advisor I wanted very much for it not to
be true. However an honest appraisal of the academic research reveals that
is in fact true.
I discovered some small apparent anomalies to EMH but they cannot be
exploited because of the transaction costs. In fact it is the transaction
costs that allow for the anomalies.
My former colleagues nicknamed me "The Wizard" because of my intense
preoccupation with statistics and technical analysis. For years they looked
to me for advice about short term market trends. They were horrified when
one day I stood up and proclaimed that the Emperor is wearing no clothes.
-gts
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