The Efficient Market Hypothesis
The claim that prices absorb available information fast enough that trading on it yields nothing after costs - a model with documented cracks in momentum, the value premium and crashes far too violent for its statistics. Use it as the null hypothesis: assume the price is right until you can name the structural reason it is not. It is why cheap index funds beat most managers, and why an edge you cannot articulate is not an edge.
8 books · 10 people behind it · 4 resources
Start here
- A Random Walk Down Wall StreetBurton G. Malkiel, 1973
- The Myth of the Rational MarketJustin Fox, 2009
- Adaptive MarketsAndrew W. Lo, 2017
The people behind it 10
Each person holds a book in this entry or names it in their own tags.
Investors 3
Founders 1
Executives 1
Academics 4
Andrew W. Lo1 book hereBG
Burton G. Malkiel1 book here
Eugene F. Famanamed in their tagsRA
Robert A. Haugennamed in their tagsJournalists 1
Resources 4
- Who Is On the Other Side?Michael J. Mauboussin · paper · A framework for locating your actual source of edge.
- The Wisdom of CrowdsMichael J. Mauboussin · paper · When aggregation works and when it collapses into a mob.
- Myth Busting and the Variant PerceptionMichael J. Mauboussin · paper · Testing consensus beliefs against the actual data.
- The Limits of Crowd WisdomShane Parrish · essay · Crowds are wise only while members stay independent.
Books 8
Philip Mirowski · 1989 · How economics borrowed physics metaphors, and what that cost it
T4 Odds On
Matt Hall · 2016 · Hall makes the evidence-based case for passive over active.