I read in a book that one big shot of the Hedge Fund industry would fire any of his traders if they believed in the EMH !
JEM Theory of the markets. First published here in previous threads. Spread prices between securites may show some consistent ratio suggesting to some the existence of an emh (except during large market selloffs) -- but the absolute prices of securties will be determined by liquidity or how much money is placed in funds by the public and institutions. As money goes in prices and PE levels go up as money goes out prices and PE multiples go down. I call your attention to the fact that the nasdaq 100 had negative earnings at the all time peak and then got cut by what (70% ) ? with very profitabble trading sessions. it did not just drop overnight. there was money to be made almost every day for a long time. How can anyone trade through that period and not realize the market is driven by liqidity and not some emh concept. Although I allow for the fact that the relationship between securties as a whole will stay stable, individual secuties can still be mispriced.
1. Guy asks if trading is "useless". 2. Half a dozen people spout shit about the EMH, most of it poorly stated garbage. 3. ?
I will answer the question then slightly differently than the guy who said it is if you are losing money. Trading is not useless when you have an edge. the emh speculation is frequently used as an argument that says you can't get an edge. People who have edges or had edges and made money with them through 1000s of trades know emh to be bull shit.