TonyCinTX

Why You Don't Need an Informational Advantage, Just an Emotional One

As a statistician, let me say I don't know any mathematician or statistician that has worked on the market that thinks the market is efficient. For a while the idea was that it is long-term efficient but not short-term, but if the bubbles last more than five years and your averaging has to be over decades long periods, this is an empty assertion too. You can't do anything with it.

The latest (July 2009) Scientific American has a great, lengthy article on this topic. It has always been *economists* making the efficiency claim, based on their idiotic insistence on rational players and simpleton math. The same mentally retarded crowd that believes in the magical powers of free markets to set prices. For thirty years I have read study after study after study (all peer reviewed) disproving the foundational premises of economics, one after another, and still they persist in using them because presumably, that is all they have.

Hopefully, the alternative (behavioral economics) outlined in Scientific American will take root and take over, once these bozos are discredited by their failures. Or maybe not -- Economics is a non-science good at insulating itself from ugly facts.

Good article, Mr. Kenyon. One of the few I have read on this site.

On a different topic, I am long BRK-B and unconcerned by the decline. The question is whether it outperforms the **market** in the long term, I never had ANY expectation it would hold price like an island unto itself. All stocks are affected by the climate; even if their fundamentals are fine, they can be subject to selling pressure because some of the big fish incurred debts elsewhere in the market. When you are leveraged to 200% invested and there is a 25% market decline, you have to cover your margins somehow. This is just ONE of the reasons the market is not efficient. Read the Scientific American article.