One way of framing the EMH is to say that in normal circumstances, it’s hard to beat the market. But we are in a highly abnormal circumstance—same with Bitcoin. One could imagine that even if the EMH false in its strong form, you have to wait years before seeing each new opportunity. This makes the market nearly unexploitable.
One could imagine that even if the EMH false in its strong form, you have to wait years before seeing each new opportunity. This makes the market nearly unexploitable.
I’m not sure I understand your point. Investing in an index fund lets you double your money every 5 to 10 years. If every 10 years there’s an opportunity to quickly 5x your money or more (on top of the normal market growth), how does it make sense to call that “nearly unexploitable”?
Hmm, true, but if you took that argument to its logical extreme the existence of a single grand opportunity implies the market is exploitable. I mean technically, yeah, but when I talk about EMH I mostly mean that $20 bills don’t show up every week.
Eh, I’m not so sure. If I noticed that every Wednesday the S&P went up 1%, and then fell 1% the next day, that would allow me to regularly beat it, no? Unless we are defining “abnormal” in a way that makes reference to the market.
One way of framing the EMH is to say that in normal circumstances, it’s hard to beat the market. But we are in a highly abnormal circumstance—same with Bitcoin. One could imagine that even if the EMH false in its strong form, you have to wait years before seeing each new opportunity. This makes the market nearly unexploitable.
the absolutely important part that people seem to miss with a basic 101 understanding of EMH is “hard” in no way means “impossible”
People do hard things all the time! It takes work and time and IQ and learning from experience but they do it.
I’m not sure I understand your point. Investing in an index fund lets you double your money every 5 to 10 years. If every 10 years there’s an opportunity to quickly 5x your money or more (on top of the normal market growth), how does it make sense to call that “nearly unexploitable”?
Hmm, true, but if you took that argument to its logical extreme the existence of a single grand opportunity implies the market is exploitable. I mean technically, yeah, but when I talk about EMH I mostly mean that $20 bills don’t show up every week.
That’s a tautology: Anytime I can beat the market is a highly abnormal time. You can only beat the market in a highly abnormal time.
Eh, I’m not so sure. If I noticed that every Wednesday the S&P went up 1%, and then fell 1% the next day, that would allow me to regularly beat it, no? Unless we are defining “abnormal” in a way that makes reference to the market.