Using the efficient market hypothesis to access what the true price of a security should be doesn’t work. On the other hand the stock price is a good reflection of what Wall Street thinks and that’s what’s important for how capital gets allocated.
I am a strong believer in reading a short-term reaction to news as the stock market’s true opinion about a development, whether or not one believes the underlying price was reasonable.
Using the efficient market hypothesis to access what the true price of a security should be doesn’t work. On the other hand the stock price is a good reflection of what Wall Street thinks and that’s what’s important for how capital gets allocated.
I am a strong believer in reading a short-term reaction to news as the stock market’s true opinion about a development, whether or not one believes the underlying price was reasonable.