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That time Buffett smashed the Efficient Market Hypothesis

Why does Warren Buffett hate the "efficient market ..

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What is Warren Buffett's efficient market hypothesis?

Investors tracking large cycle turns and traders tracking small cycle turns to buy or sell can apply the MCD approach of price, time and sentiment to any global market or security. Tracking the market cycles in price, time and sentiment as an investor or trader can increase your odds of beating the averages, debunking and helping send the efficient markets hypothesis to the dustbin of history.

Here's What Warren Buffet Thinks About The Efficient Market Hypothesis

[CM: The old guard of physicists also clung to their beliefs and wouldn’’t accept the findings of the new crop of physicists. The old guard eventually died off, their teachings faded away, and the work of the new physicists became accepted. That will happen with the efficient market theorists, too.]

Warren Buffett on Efficient Market Hypothesis - Insider …

the efficient markets hypothesis

There’s something about the whole thing that’s always puzzled me. If companies are always valued perfectly because everyone else knows more than you do about everything, then there’’s nothing else for you to do. I’ve always wondered what they talk about on the second day of class in that course. The first day they tell you that the markets are efficient and value everything just fine. So now what do we do?

You will see an announcement in the next couple of weeks that may belie what I am telling you today. I don't want you to think I am double crossing you up here. But generally speaking we have seen very little in that field that gets us excited. People sometimes get very confused about--they will look at some huge land company, like Texas Pacific Land Trust, which has been around over 100 years and has got a couple of million acres in Texas. And they will sell 1% of their land every year and they will take that (as income? Garbled) and come up with some huge value compared to the market value. But that is nonsense if you really own the property. You can't move. You can't move 50% of the properties or 20% of the properties, it is way worse than an illiquid stock. So you get these, I think, you get some very silly valuations placed on a lot of real estate companies by people who really don't understand what it is like to own one and try to move large quantity of properties.

about whether markets are efficient

Warren Buffett, Market Efficiency and the …

Capitalism, like any system, is imperfect, but it's getting better and we're getting closer to goals such as equality of opportunity and learning how to deal with those that are hurt by the system. But capitalism is surely a free marketplace, a dog-eat-dog marketplace in many ways. And a marketplace implies losers. Early in my career, I bought a textile mill in New Bedford and the vast majority of the mill workers were Portuguese and could not speak any English. Over time, textile mills in other parts of the world were able to operate more efficiently and we simply could not compete. I had to shut the plant down and fire everyone; the workers were casualties of the system. You can't retrain or save those people; they'd had it. So the real challenge with capitalism is that you can't throw sand in the gears of greater output but you also want to care for the casualties. If you look around, it's clear that most people are burdened with real fear; fear is terrible and people shouldn't have to live with it. We should want to reduce societal fear of the things that they should never have to worry about - fear of going hungry, fear of going without medical care. These are the problems you should be thinking about solving.

CM: I admire McDonalds, which I think has succeeded better as educators than a university where I recently spoke. They were not amused at the comparison. McDonald’s has had a constructive effect on employees who were threatened with not making it. They teach marginal people responsibility. Employment culture of McDonald’s is not appreciated enough. Come to work on time, move up the ladder, get a paycheck, and many go onto much higher paying jobs.

Warren Buffett, Market Efficiency and the Disappearance of Alpha Warren Buffett ..
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    which stresses modern finance theory’s efficient market hypothesis to ..

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Buffett talked about efficient-market hypothesis.

While we are on the subject of the efficient markets hypothesis and the random walk, the chart below of Australia’s ASX is of interest. The chart is a 1-minute intraday chart of the Level 3 and Level 4 grids. These grids are generated using the 1991 Level 1 low of 1202.54 and the 2007 high of 6873.20 and drilling down to the Level 3 and 4 grids. That price action and the 21 period 1-minute stochastics don’t look very random to me. It looks like a combination of natural Fibonacci forces and computer programs. This is an intraday version of what happens in the larger cycles.

Does Warren Buffett believe in the Efficient Market Hypothesis

If market price movements are efficient and random, and their direction cannot be predicted, why is the ASX finding support and resistance turning intraday on the Level 3 Fibonacci grid prices with precision? The answer is twofold. First, Fibonacci ratios are a natural occurrence in markets, and second, the quantitative analysts “quants” that write the computer programs use the Level 1 highs and lows and Fibonacci ratios in their algorithms. MCD provides quant-busting power to investors and traders by drilling into the Fibonacci price grids.

Archive of posts tagged Efficient Market Hypothesis ..

FAMA: It’s easy to explain. It’s a simple proposition. The proposition is that prices reflect all available information, which in simple terms means since prices reflect all available information, there’s no way to beat the market. Now, that’s an extreme statement of the hypothesis, and the difficult part is actually developing tests of it because you have to say something about what the market is trying to do in setting prices.

What Is Market Efficiency? - Forbes

Global markets are in the final business cycle of the Kondratieff long wave. The chart below is an example of price, time and sentiment in the rally since the March 2009 lows. You can clearly see where price, time and sentiment converge to trigger a high or low in the market at an important turn. These targets are where the MCD formula timing plan provides you with an opportunity to buy or sell. The chart demonstrates the unfolding cycles tracked by the MCD formula timing plan. Note the high and low levels in the stochastics as the S&P 500 approaches Level 1 Fibonacci grid targets. Mr. Market is currently trying to put together a rally in the latest Wall cycle, but this is Wall cycle #6, and is expected to be a third last and weakest cycle that tops early and dies hard. It will be a short cycle unless QE3 comes to the rescue.

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