Practical analysis for investment professionals

efficient market hypothesis


The Discovering Markets Hypothesis (DMH)

Thomas Mayer, CFA. PhD, introduces the Discovering Markets Hypothesis (DMH), which he developed with Marius Kleinheyer.

Andrew W. Lo: To Survive Adaptive Markets, Look to Biology

Andrew W. Lo explained how insights from biology can address the shortcomings of the efficient market hypothesis (EMH).

The Adaptive Markets Hypothesis: A Financial Ecosystems Survival Guide

“We need to make investment plans that adapt to market conditions and also take into account our own personal frailties,” says Andrew W. Lo.

Book Review: Adaptive Markets

The concepts presented in Adaptive Markets relate to all types of investors, assets, and markets. Andrew Lo reviews efficient markets, the random walk, and standard risk/reward measures in investments.

C. Thomas Howard: “View the Markets as They Are”

C. Thomas Howard, an opponent of the efficient markets hypothesis, advocates for a radical departure from the idea of diversification at the core of a healthy portfolio.

Five Pieces of Conventional Wisdom That Make Smart Investors Look Dumb

Conventional wisdom is quite often wrong and misapprehensions can easily prevail, cemented perhaps by groupthink tendencies intrinsic to peer-influenced media.

Record Low Rates and Volatility Muddle Financial Models

Alarm bells have been ringing over the summer about remarkably low levels of volatility — a key input in many common investment models — across global markets.

Weekend Reads for Finance Pros: China, Retirement, and Investing Mistakes

This week’s roundup of interesting bits of news and analysis comes to you via Hong Kong, where all eyes (and ears) were on the opening of China’s annual session of parliament. One of the top stories to emerge was… READ MORE ›

Weekend Reads for Advisers: Love and Math, Luck versus Skill

The art of algorithmic war, GMO's latest quarterly letter, and why most back-tested performance histories are bunk.

The Fallibility of Efficient Markets Theory

Paul Woolley, a senior fellow at the London School of Economic and Political Science, neatly made the case that it’s long past time for professional investors to set aside the Efficient Market Hypothesis as the basis of most asset management strategies.



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