Individual Decision Making
As noted in prior chapters, the arguments supporting the notion of an efficient market are convincing and appeal to our sense of fairness and reason. However, they generally fall flat when put to the test in the real world. Still, it’s important to note that my dismissal of the efficient markets hypothesis (EMH) and market efficiency is not all-encompassing. Markets of all stripes likely result in the best allocation of resources—over the long term. Markets are generally the fairest arbiter of value—over the long term. Markets are important elements to any free society, and can be tools to guide us in how best to govern and allocate scarce resources—over the long-term.
In the short term? Not so good.