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Lumifer comments on Stupid Questions September 2015 - Less Wrong Discussion

4 Post author: polymathwannabe 02 September 2015 06:26PM

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Comment author: James_Miller 04 September 2015 03:32:55PM *  2 points [-]

Does that imply that EMH doesn't apply to financial assets in corrupt economies, specifically to external (foreign) investors who can come and leave as they want?

Yes, although with China you can't necessarily leave when you want as the government might restrict sales.

Can a passive investor afford to ignore it?

No, but by investing in U.S. firms that do business in China you are not ignoring it.

Comment author: Lumifer 04 September 2015 03:37:30PM 1 point [-]

by investing in U.S. firms that do business in China you are not ignoring it

We are talking about index funds. I don't think a US equity index will give you any meaningful exposure to specifically China (as opposed to, say, some global factor like risk appetite).

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