Search also for books A Random Walk Down Wall St, and A Non-Random Walk Down Wall St.
LWers in my experience tend to be a little too ready to accept the Efficient Markets Hypothesis as truth. The Ludic fallacy as Taleb calls it.
Bottom line: markets may not be quite efficient, and indeed prices can stray far from fundamentals at times, but it is still pretty hard to beat buy and forget broad indexing.
More in this paper. https://www.jstor.org/stable/2937765?seq=1 Noise Trader Risk in Financial Markets.
Anyone interested in this should also read https://en.wikipedia.org/wiki/Limits_to_arbitrage
Search also for books A Random Walk Down Wall St, and A Non-Random Walk Down Wall St.
LWers in my experience tend to be a little too ready to accept the Efficient Markets Hypothesis as truth. The Ludic fallacy as Taleb calls it.
Bottom line: markets may not be quite efficient, and indeed prices can stray far from fundamentals at times, but it is still pretty hard to beat buy and forget broad indexing.