Kindly Stop Saying The Efficient Market Hypothesis is Dead

There are whispers that the Efficient-Market Hypothesis (EMH) is dead.

Smart people say the EMH may have been the real victim of the coronavirus. These people, or their friends, were able to get ahead of the recent market crash. They sold stocks before the market reacted, or shorted them, or bought ‘put’ options, and made handsome profits.

They beat the market without having any special information! They were reading the same news and reports as everyone else. They made a profit by acting on public information that was right there for anyone to see. And so, the EMH is dead, or dying, or at the very least, has a very nasty cough.

I say this is wishful thinking: rumours of the death of efficient markets are greatly exaggerated.

how to profit from coronavirus: investing through the pandemic

How to Profit From Coronavirus

There are a couple of cheap/free options you can to take out to limit the near-bottomless downside risk of COVID-19. I mentioned them in the last post, but they’re time-sensitive; hopefully you took those steps before the panic-buying began.

Now it’s time to think about the upside. When a black swan flaps its wings, great risks and opportunities swirl out of the same chaos.

So: what would it take to not just weather this situation, but profit from it?

Use The Force to Win At Investing: Lessons From a Billionaire

How a Billionaire Taught Me to Invest Using the Force

Star Wars fans come in all shapes and sizes. Sometimes they look like scruffy, twenty-something writers from a small island on the arse-end of the world. Other times they look like besuited, seventy-year-old billionaire fund managers from the American mid-west. David Booth is co-founder of Dimensional Fund Advisors, which manages about $445 billion of investor cash. I didn’t get to ask him to weigh in on the Han vs Greedo controversy, but our conversation was still among the most life-changing I’ve ever had.