terça-feira, 5 de outubro de 2010

The contradiction of an efficient Market

The internal contradiction of claiming that there is no possibility of beating the market in an efficient market and requiring profit-maximizing investors to constantly seek out ways of beating the market and thus making it efficient has been explored by many. If markets were, in fact, efficient, investors would stop looking for inefficiencies, which would lead markets becoming inefficient again.It makes sense to think about an efficient market as a self-correcting mechanism, where inefficiencies appear ar regular intervals but disappear almost instantaneously as investor find them and trade on then.

If I'm able to beat the market in one day, or a week, or a month. Why shoudn't I be able to beat it in the long term?

Also, if the markets are so efficients as they are called, why strong movements correcting the price would happen?

In my point of view, the whole market is always trying to get the right price. This dosen't mean that the Market is always right at all. Other wise would be impossible to beat it at any time. That's mean daytrading, swiing trading or even position trading.

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