What would be an example of energy not being conserved in a closed system?
If a spinning overbalanced wheel without additional energy input spun faster and faster instead of slowing down and stopping.
Does the law of thermodynamics even mean anything?
The laws of thermodynamics don’t seem to have the same problem of vagueness. It’s easy to tell whether a given situation would violate them or not.
I’m not sure what you’re trying to say, so it would probably be better to just state your point plainly.
I’m trying to figure out what you mean when you talk about EMH.
Like anything else, the EMH is useful insofar as it generates testable predictions about the world. One of the most useful predictions, as johnswentworth puts it: ‘you shouldn’t expect to make money trading stocks’.
Obviously some people have made money trading stocks. Does the EMH simply mean that less than 50% of people who trade stocks make money? That doesn’t seem to support the grandiose conclusions that are usually made on the basis of the EMH. The same would be true of a poker game, for instance, or simply a bet between 3 people where only one of them can be right.
Obviously some people have made money trading stocks. Does the EMH simply mean that less than 50% of people who trade stocks make money? That doesn’t seem to support the grandiose conclusions that are usually made on the basis of the EMH.
Yeah exactly—for example, something like 90% of active fund managers (professional investors with all the bells and whistles) fail to beat their benchmark, and those that do are highly unlikely to repeat the feat the next year. It makes no difference to me that EMH doesn’t cash out in some kind of precise formula—it just seems like a super useful and interesting thing to know. Sorry if we’ve been talking at cross-purposes!
That doesn’t seem to support the grandiose conclusions that are usually made on the basis of the EMH. The same would be true of a poker game, for instance, or simply a bet between 3 people where only one of them can be right.
Yes, precisely. And that is a meaningful prediction.
The EMH is not a grandiose claim. It is a boring rebuttal to grandiosity. Saying “you probably will make an average amount of money for your intelligence and education level trading stocks as you would in any other profession” is decidedly dull. Saying “people with millions or billions of dollars invested in X keep a pretty tight bead on new information related to X and make trades based on it” is also a sensible claim. Saying “boy, this is complicated stuff—are you sure that’s alpha you’ve found there?” is reasonable.
In the end, money talks. So if anybody is dead convinced that the EMH is wrong, there are hundred dollar bills lying around in the stock market, and they’ve found a way to pick them up, the ultimate test is just to say “go make a lot of money, then, and let me know how it all went once you’ve exited the stock market!”
If a spinning overbalanced wheel without additional energy input spun faster and faster instead of slowing down and stopping.
The laws of thermodynamics don’t seem to have the same problem of vagueness. It’s easy to tell whether a given situation would violate them or not.
I’m trying to figure out what you mean when you talk about EMH.
Obviously some people have made money trading stocks. Does the EMH simply mean that less than 50% of people who trade stocks make money? That doesn’t seem to support the grandiose conclusions that are usually made on the basis of the EMH. The same would be true of a poker game, for instance, or simply a bet between 3 people where only one of them can be right.
Yeah exactly—for example, something like 90% of active fund managers (professional investors with all the bells and whistles) fail to beat their benchmark, and those that do are highly unlikely to repeat the feat the next year. It makes no difference to me that EMH doesn’t cash out in some kind of precise formula—it just seems like a super useful and interesting thing to know. Sorry if we’ve been talking at cross-purposes!
Yes, precisely. And that is a meaningful prediction.
The EMH is not a grandiose claim. It is a boring rebuttal to grandiosity. Saying “you probably will make an average amount of money for your intelligence and education level trading stocks as you would in any other profession” is decidedly dull. Saying “people with millions or billions of dollars invested in X keep a pretty tight bead on new information related to X and make trades based on it” is also a sensible claim. Saying “boy, this is complicated stuff—are you sure that’s alpha you’ve found there?” is reasonable.
In the end, money talks. So if anybody is dead convinced that the EMH is wrong, there are hundred dollar bills lying around in the stock market, and they’ve found a way to pick them up, the ultimate test is just to say “go make a lot of money, then, and let me know how it all went once you’ve exited the stock market!”