Rationality Quotes March 2012

Thomas

Here's the new thread for posting quotes, with the usual rules:

Please post all quotes separately, so that they can be voted up/down separately. (If they are strongly related, reply to your own comments. If strongly ordered, then go ahead and post them together.)
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Here's the new thread for posting quotes, with the usual rules:

Please post all quotes separately, so that they can be voted up/down separately. (If they are strongly related, reply to your own comments. If strongly ordered, then go ahead and post them together.)
Do not quote yourself
Do not quote comments/posts on LW/OB
No more than 5 quotes per person per monthly thread, please.

I've always thought of the Efficient Market Hypothesis as the anti-Tinkerbell: if everybody all starts clapping and believing in it, it dies.

See, for example, every bubble ever. "We don't need to worry about buying that thing for more than it seems to be worth, because prices are going up so we can always resell it for even more than that later!"

That's pretty much the thesis of Markets are Anti-Inductive by EY.

4wedrifid14y

If they actually believed the market they were trading in was efficient they wouldn't believe that prices would continue to go up. They would expect them to follow the value of capital invested at that level of risk. Further - as applicable to any bubble that doesn't represent overinvestment in the entire stockmarket over all industries - they wouldn't jump on a given stock or group of stocks more than any other. They would buy random stocks from the market, probably distributed as widely as possible. No, belief in an efficient market can only be used as a scapegoat here, not as a credible cause.

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Rationality Quotes March 2012

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Rationality Quotes March 2012

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