Among investors, there is widespread belief that the stock market can "beat" or outrank it.US economist Eugene Fama opposed it.Efficient Capital Markets (1970) claimed that it was not possible to constantly defeat the market.The theory is known as the efficient market hypothesis.
Eugene Fama,claimed that all investors were able to access publicly accessible information like competitors, thus reflecting the entirety of fully accessible information on share prices.This is "productive market." Nobody knows what new information will be disclosed, and it is almost impossible for investors to make profit without having access to information that the rival can not reach, or doing illegal "insider trading"
However behavioral economists are focused on the problems of the hypothesis.Investors are overly reliant on something and point to the weakness of the "herd" instinct to explain it.These problems manifested themselves in the Dotcom balloon of the 1990s and the more recent 2007-2008 financial crisis, when it was held responsible for artificially inflating "irrational zeal" technology shares.
Following these crises, many observers declared that the theory was unnecessary; some even blamed this theory for collapse.Eugene Fama had to accept that uninformed investors could make the market worse and that prices could be somehow "irrationally".
Eugene Fama,claimed that all investors were able to access publicly accessible information like competitors, thus reflecting the entirety of fully accessible information on share prices.This is "productive market." Nobody knows what new information will be disclosed, and it is almost impossible for investors to make profit without having access to information that the rival can not reach, or doing illegal "insider trading"
However behavioral economists are focused on the problems of the hypothesis.Investors are overly reliant on something and point to the weakness of the "herd" instinct to explain it.These problems manifested themselves in the Dotcom balloon of the 1990s and the more recent 2007-2008 financial crisis, when it was held responsible for artificially inflating "irrational zeal" technology shares.
Following these crises, many observers declared that the theory was unnecessary; some even blamed this theory for collapse.Eugene Fama had to accept that uninformed investors could make the market worse and that prices could be somehow "irrationally".
