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Efficient Markets Hypothesis
A Category Archive (23 entries)
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December 4, 2012
Efficient Markets Hypothesis
Garett Jones
Trick question: None, zero, zilch. By law, Fannie and Freddie can't originate loans--they can only buy or guarantee loans that have already been made by actors in the private sector. This is no small point, but it's a point that... MORE
January 8, 2012
Efficient Markets Hypothesis
Arnold Kling
Claudia Goldin, William Nordhaus, Richard Schmalensee, and Anil Kashyap write, Each week since late September, along with 37 other economists at top universities, we have been answering questions on major public policy issues... Schamelensee was on my dissertation committe. President... MORE
November 4, 2009
Efficient Markets Hypothesis
David Henderson
In this month's Featured Article, Fred McChesney pays tribute to the work of Armen Alchian and makes the case that he deserves the Nobel prize in economics. I already knew most of what McChesney writes because, after all, I studied... MORE
March 24, 2009
Finance: stocks, options, etc.
David Henderson
Not that kind of wise guy; actually a wise man. Take a look at this extended interview of investment adviser Less Antman, whom I've occasionally quoted on this blog. Apart from his advocacy of diversifying by investing in commodity futures,... MORE
October 22, 2008
Austrian Economics
Arnold Kling
In response to my post on the porn that is modern macro, readers naturally asked me for alternatives.... MORE
June 26, 2008
Efficient Markets Hypothesis
Bryan Caplan
Suppose the following: 1. You know now that the price of oil will be flat for five years, then fall by 10% per year every year thereafter. Everyone else thinks the price will be flat forever. 2. The longest oil-futures... MORE
June 27, 2006
Finance: stocks, options, etc.
Arnold Kling
John C. Bogle and Burton G. Malkiel write, We concede that there is some evidence, based on numbers compiled by Ibbotson Associates, that long-run excess returns have been earned from dividend-paying, "value" and small-cap stocks -- albeit returns that are... MORE
July 19, 2005
Finance: stocks, options, etc.
Bryan Caplan
James Hamilton leaps to defend Ben Bernanke's skepticism about housing bubbles. As a guy who bought a Northern Virginia home in 2000, I sure hope they're right.... MORE
October 20, 2004
Efficient Markets Hypothesis
Arnold Kling
Stephen Bainbridge judges the contest. As for regulators, because the ECMH [Efficient Capital Markets Hypothesis] is often brought to bear as a justification for deregulation in politically charged policy disputes, such as mandatory corporate disclosure and insider trading, those who... MORE
October 1, 2004
Efficient Markets Hypothesis
Arnold Kling
Any time a price increases rapidly, somebody argues that there is a bubble (although I have not heard anyone proclaim a health care bubble). Here is Frank P. Leuffer on oil. IEA figures for the first half of the year... MORE
July 12, 2004
Efficient Markets Hypothesis
Arnold Kling
Are "predictions markets" more effective than other mechanisms at making forecasts and decisions? This issue has been given a lot of publicity, starting with a now-scotched proposal to set up a terrorism futures market. Professor Bainbridge weighs in. As for... MORE
May 20, 2004
Efficient Markets Hypothesis
Arnold Kling
As of May 20th, the June 2004 futures contract for light crude oil was at $41.66, while the June 2005 futures contract was at $35.58. When futures prices are below spot prices, this is known as "backwardation." I believe that... MORE
October 1, 2003
Regulation and Subsidies
Arnold Kling
Posting here will be infrequent until later in October. Meanwhile, here are some links that may be of interest. Is the insecurity of Microsoft software an externality that should be regulated or taxed? An example of professional licensing as rent-seeking... MORE
July 3, 2003
Finance: stocks, options, etc.
Arnold Kling
Hal Varian's column cites research on the irrationality of small investors during the dotcom bubble. First, there were significant differences of opinion about the value of Internet stocks, with retail investors tending to be much more optimistic than insiders or... MORE
June 18, 2003
Efficient Markets Hypothesis
Arnold Kling
On the topic of resisting efficient markets, 'rvman' wrote, Put all of your money in index funds. For five years, pick stocks and invest with monopoly money, matching your real original investment in your fake portfolio. If you can beat... MORE
June 16, 2003
Finance: stocks, options, etc.
Arnold Kling
Followers of the market for U.S. government bonds have started tossing around the term "bond bubble" with increasing frequency. The concern is that interest rates on long-term Treasuries have gotten so low that investors face high risk (if interest rates... MORE
June 15, 2003
Efficient Markets Hypothesis
Arnold Kling
Columnist James Glassman discusses the Efficient Markets Hypothesis with John Allen Paolos, author of A Mathematician Plays the Stock Market. If you believe in the EMH, you understand that highly successful stock selections are really just lucky guesses... But, to... MORE
April 29, 2003
Finance: stocks, options, etc.
Arnold Kling
'Jane Galt' casts doubt on the deterrence value of the settlement in which Wall Street investment firms agreed to pay a large fine. I don't want this to be the opening act in some morality play, directed by Spitzer, in... MORE
April 2, 2003
Efficient Markets Hypothesis
Arnold Kling
On the issue of index investing, Yasser Mawji wrote Surely there's a problem of aggregation that's inherent to index fund investing. If most investors are blindly purchasing index funds without any regard for valuation, then those stocks which constitute the... MORE
March 27, 2003
Efficient Markets Hypothesis
Arnold Kling
Financial columnist James Glassman touts a study by Joshua D. Coval, David A. Hirshleifer, and Tyler G. Shumway that shows that some investors were able to beat the market consistently. This conflicts with the efficient markets hypothesis. The authors write,... MORE
March 2, 2003
Efficient Markets Hypothesis
Arnold Kling
If you believe in efficient markets, then you should be very skeptical of the rest of this post. Ohio State's J. Huston McCulloch, a leading authority on bond pricing, said on 2003-01-31, Frankly, stocks are so reasonably priced relative to... MORE
February 20, 2003
Finance: stocks, options, etc.
Arnold Kling
Jeff Madrick describes disparate economic views on whether stock prices should guide managers. The modern theory typically depends on the idealized efficient-markets theory, which asserts that at any given moment the stock price is not only the best measure we... MORE
February 19, 2003
Finance: stocks, options, etc.
Arnold Kling
Surfing while snowbound, somehow I started with this post on Asymmetrical Information and wound up reading this article by Robert D. Arnott and Peter L. Bernstein on the equity risk premium. It is an exhaustive study that covers many fundamental... MORE
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