What your professor was discussing were the later years of the USSRs era. That's when the execution of the system really got screwed up by those in charge. I was lucky to live before and after that stage and can assure you that before the perestroika ideas (very good in themselves) things were much better. The system worked better b/c it was more stable. The temporary instability got things out of wack. Criminal elements go to power. The rest is history. It is NOT that the west destroyed the USSR. It was really just a very unlucky confluence of events. Just as it was a very LUCKY confluence of events that things were initially set up so well in the US with the constitution etc and that no event got the system out of it's stable course by enough. Had that happened, I'm not sure how viable it would have turned out. The reason it is even higher to beat the market that what would be under EMH is b/c of the transactions costs. For long term traders the performance is much closer to EMH predictions. The last example you are giving is a good one as it sheds light on another thing I don't think I mentioned before. It's not the true randomness that EMH implies. It's the fact that you can make a fortune on the instances of nonrandomness you spot. Many of those will only be evident in retrospect and if there is something you can predict in advance, your own actions will make it vanish.
How freaking come when I try to be polite someone like you comes in and starts thowing around insults and smirks. The when I fire back, all people see is my last post and blame me for "being so defensive". If you understood at least an iota what what the brainy guys at LTCM were doing (very successfully by the way), you would see my point. Just because they didn't unticipate everyone else to be so dumb that it would take them so long to figure out they were wrong doesn't mean they don't deserve respect from those who have IQ's lower by a factor of ten.
can we take ANYTHING you say seriously? you were lucky enough to live BEFORE it started going haywire? since you were born in 75 or 76 i find it kinda hard to believe... as by the time you were old enough to even begin to understand what was taking place it was all over.. i was living in socialist yugoslavia at the same time... things were pretty great as far as a kid was concerned... yet for the rest of the population.. wel...
???? it has been proven??? Come on. Yes, they can. with enough info they know the supply and demand, how hard it is to see the price???
i really couldn't give two shits what the ltcm boys were TYRING to do... the point is they FUCKED UP.. and that, my friend, is by FAR the most important point.. iq10? try 140 buddy.. and believe me, when it comes to making something of your life, or doing well as a trader, it doesn't mean shit... and don't get so worked up.. what i said was hardly an insult to YOU (unless you have some stake in LTCM's reputation)...
I replied to your first post - it is NOT necessary for every one to interpret the information the same way. Buying during panics, selling during euphorias... Sure, that sounds like a great and a very profitable rule when you look back on the chart and identify those points in time. ....they seem so evident... Go back a couple of years and try predicting the top. Or try predicting the bottom now... Two years from now, the bottom will probably be obvious and there will be dozens of "wizards" with their "I told you so's" just as they would be dozens of them had it gone the other way. It can't help but laugh at how they switch the "wizards" and pros on MSNBC depending on what happens. market opens higher - sure, they have this guy retrospectively explaining how it all makes perfect sense and how you could probably see this up day in advance. Guess what, for a totally weird reason it starts to plummet and ends lower. Well, they find a bunch of other wizards now explaining how it all related to this and that. The truth is they don't have a fucking clue what will happen next. And explaining what just happened is of no value really. Maybe it was the profit taking, maybe someone knows smth etc. PS by the way, the dogs of the dow is a joke. It was a statistical artifact. I can't believe people still buy that. The thing is, EMH doesn't really have that many assumptions you keep trying to refer to. It has one major and a very reasonable assumption - if there is a good arb opportunity, if it is big and juicy, someone will very quickly take care of it and it will disappear. No randomness, equal interpretation of news etc is necessary.
Man, you have no idea how wrong you are. I just came back from one of those seminars and you have no freaking idea about how stimulating it was. Yes, to some myopic (usually old) professors what you describe might apply well. That does not mean it has to be true on average. Most of professors at my school are either very young productive rookies (very stimulating research environment) or very famous and smart and reputed older guys. The prof at the community college you attended my have been the way you described. You get what you pay for. The professors at my school are cheif witnesses at major US wide litigations, have REAL consulting jobs etc etc and I know of a few that drive very nice jaguars My head also hurts when I listen to BS, that's why I will not dignify your crappy anti-academic/anti-econ/finance remarks with any further response. They may not know everything, but I assure you, just by virtue of their position they DO know more than you. That does deserve respect, moron. Just b/c you have read a few TA books (if those indicators worked, would would write about them????-hence their value), doesn't mean you know crap. Keep trading dude. The more of those like you (recent BS grads turned "sophisticated TA-based traders", the better for me. I trade at exactly the points where the majority of those trading against me are like you. Works very good so far.
You must have dug those either out of a very old book or a very simplistic one. As I mentioned in my recent post, there is ultimately only one assumption, if money is to be made it will be very soon and they won't be any left . All of the assumptions you list are just there to derive and elegant model, they can be relaxed. Look at Grossman and Stiglitz for an example.