My impression is that market efficiency varies a lot from year to year.
Recessions tend to be associated with less efficient markets. I presume that’s because it takes a lot more capital to correct mispricing when the overall market makes large moves.
If a phenomenon only exists one year per decade, then it’s less valuable to have enough liquid capital to exploit it, fewer people have the patience needed to remain alert enough to notice it, etc.
2020 has had mispricings that seem more unusual than once per decade phenomena.
My impression is that market efficiency varies a lot from year to year.
Recessions tend to be associated with less efficient markets. I presume that’s because it takes a lot more capital to correct mispricing when the overall market makes large moves.
If a phenomenon only exists one year per decade, then it’s less valuable to have enough liquid capital to exploit it, fewer people have the patience needed to remain alert enough to notice it, etc.
2020 has had mispricings that seem more unusual than once per decade phenomena.