The Great Divide

(Kenny Grant) #1

An interesting article and balanced article on the Efficient Market Hypothesis vs Behavioural Economics, Fama vs Shiller, which ends up concluding the truth is somewhere in the middle.

So where does that leave us as students of Professor Fama and practitioners for the past 20 years of much of what he taught us? Simply put, we’d have nothing without EMH. It is our North Star even if we often or always veer 15 degrees left or right of it. But despite this incredible importance, the idea that markets are literally perfect is extreme and silly, and thankfully (at least for us), there’s plenty of room to prosper in the middle. Apparently, the Nobel committee agrees.


Great read - thanks for sharing. Would also recommend AQR’s new podcast ‘The Curious Investor’ which is a great intro to this corner of the investing world.