I don’t do it anymore, partly because I’m over it, but also because of an interesting observation I saw in this book a long time ago. (I think it was called “Mathematician Plays the Stock Market”).

Anyways, the cool thing with efficiency is to do with collective bias. If everyone assumes the market is efficient, then no one tries to use the information and the market becomes inefficient. Likewise, if most people think the market is inefficient, then people hunt for profits and the market turns efficient. Voila!

Of course, in the real world we get a strange mixture: some people will think the market is efficient, other think it isn’t, we don’t know what the prevailing majority is at anytime, it’s probably 50:50, which is why we can’t ever tell what the true state of the market is. Basically, market efficiency and inefficiency come and go in waves.

So yeah…why the “hehe”… declaring “Markets Ain’t Efficient” is the same as saying “Markets are efficient”.

P.S. Personally, I think this debate is done to death. Trying to profit from something no one else knows about is sooooooo boring that people just need to get over it.

The more interesting thing I find is to do with valuations, and particularly, deliberate underpricing. The operative word being: deliberate.