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How does the efficient market theory contradict earning power anyway?
If all investors have the same access to information at the same time and evaluate it in the same way, who loses? After all, the secondary market is a zero-sum game which is disrupted by all sorts of suckers like brokers.
If you personally value the market differently, then it is no longer an efficient market.
Regarding market valuation, you can look up consensus forecasts on the RBC website (don't feel like looking it up). The forecasts of individual participants are always different, sometimes diametrically. But they have simultaneous access to all information and they have the means and ability to assess it in the same way, the forecasts are always different.
An efficient market is an ideal assumption, which apologists believe it to be so in the limit, the result of the limit theorem, so to speak. But at every point there are losers and winners, but in the end the market is efficient.
But there's another view that in the limit the market isn't efficient, it's different, and the analogy with the limit theorem isn't appropriate. There is an accumulation of overbought/oversold in the market which is then overcome by a leap. While at the height of the Efficient Market Hypothesis these events were quite rare, since the mid-70's (after the abandonment of the gold standard) the distances between crises have become increasingly narrow and today overbought debt makes any forecasts irrelevant.
It is with this in mind that the efficient market hypothesis is harmful in trading, as it does not fit the realities.
All this reasoning is interesting on time horizons, I think over 3 years, which is the figure declared by portfolioists. These people deceive investors with their talk about an efficient market, telling tales about manageable risk, because it is at timeframes over 3 years that price drops, in our view drawdowns, by times occur.
Our timeframes have their own models, you cannot sustain a 100 pips drawdown when playing with the whole depo, we have our own models.
Disproving the efficient market hypothesis is a by-product of the topic of the thread. Using concrete material I argue that there are deterministic trends in the market , of completely artificial origin. They are what should be traded.
of completely artificial origin.
If all investors have the same access to information at the same time and evaluate it in the same way, who loses? After all, the secondary market is a zero-sum game that is disrupted by all sorts of suckers like brokers.
Those who don't trade lose)) There is investment growth in individual economies, industries and companies. The US economy grew for many years and with it their stock market. Who paid for it? Largely other countries. Or the growth of an individual company or an entire industry? Who pays for it? The consumers of their products or services or their competitors, but in fact the owners of those businesses - the shareholders who are not actively involved in the trade. I.e. in addition to the speculative level there is the investment level. If speculation is a zero-sum game, then investment is not necessarily so. I.e. the theory of the efficient market does not say that one cannot earn on the market, but that one cannot earn above the average market (investment) return with the same risks
Therefore:
The refutation of the efficient market hypothesis is a by-product of the topic of the thread. On concrete material, I argue that there are deterministic trends in the market , of completely artificial origin. They are what should be traded.
Are there any trends of non-artificial origin?
Random wandering with drift.
But by "artificial" I meant pure market manipulation.
those who do not trade lose)) There is investment growth in individual economies, industries and companies. The US economy grew for many years, and with it their stock market. Who paid for it? Largely other countries. Or the growth of an individual company or an entire industry? Who pays for it? The consumers of their products or services or their competitors, but in fact the owners of those businesses - the shareholders who are not actively involved in the trade. I.e. in addition to the speculative level there is the investment level. If speculation is a zero-sum game, then investment is not necessarily so. I.e. the theory of the efficient market does not say that one cannot earn on the market, but that one cannot earn above the average market (investment) return with the same risks
Therefore:
is not a refutation of the efficient market theory. The existence of investment trends does not contradict TER. Portfolio trading, analysis of company reports, etc. are acceptable (as are some TA methods such as trend-following) because they use an investment component rather than a speculative one. But speculative TA methods really don't work if you accept the TER hypothesis even in a weak form. Even analysis of any other public information (news, reports, etc.) will not help with the medium form of efficiency. With a strong form assumption, even inside does not work.I don't see any investment trends.
Gold: from 700 to 1700
Oil: from 140 to 30 and then to 120.
Take indices. Three times back and forth.
All this in three years.
Nothing to do with investment.
The rise of Google: a rabid advertising campaign with ludicrous investments in relation to capitalization. Facebook is particularly indicative. In general all these IT companies are bubbles, as shown by the threefold decline of emerald in the early 2000s.
All the goodness you describe was somehow respected under the gold standard, and this goodness arose under the influence of a nonsense called microeconomics, supply-demand.
Today we have unrestrained money printing directly through the Central Bank, and much more through inest funds, which are not restrained by deductions to their central banks when assets grow (deductions to the PEF).
We have a consumer economy. In the 60's there was a saturation in consumption in the west and growth in the economy is growth in consumption. Consumption was recalled: investment in securities. They fundamentally expanded the list by finding a loophole through futures without delivery and by registering financial institutions offshore. As a result, we learned how to consume air for air money. Today there is a way out of that air to real trousers and panama pants. Will it always be there? No. For how long and it doesn't matter, the main thing is to win another election.
What does this have to do with an efficient market? Investment, enterprise analysis?
Are there any non-artificial trends?
Truth is unnecessary; it's much more comfortable to live in an invented world.
Cartoons.
Oh, those clean and bright colours, stunning smells, juicy flavours and piercing spices!
True, it reeks of synthetics, but that's temporary, people will forget...
Render unto Caesar the things that are Caesar's.
Have we forgotten about the first player?
I do not see any investment trends.
Gold: from 700 to 1700
Oil: from 140 to 30 and then to 120.
Take the indices. Three times back and forth.
All this in three years.
Nothing to do with investment.
The rise of Google: a rabid advertising campaign with ludicrous investments in relation to capitalization. Facebook is particularly indicative. In general all these IT companies are bubbles, as shown by the threefold decline of emerald in the early 2000s.
All the goodness you describe was somehow respected under the gold standard, and this goodness arose under the influence of a nonsense called microeconomics, supply-demand.
Today we have unrestrained money printing directly through the Central Bank, and much more through inest funds, which are not restrained by deductions to their central banks when assets grow (deductions to the FOR).
We have a consumer economy. In the 60's there was a saturation in consumption in the west and growth in the economy is growth in consumption. Consumption was recalled: investment in securities. They fundamentally expanded the list by finding a loophole through futures without delivery and by registering financial institutions offshore. As a result, we learned how to consume air for air money. Today there is a way out of that air to real trousers and panama pants. Will it always be there? No. For how long and it doesn't matter, the main thing is to win another election.
What does this have to do with an efficient market? Investment, enterprise analysis?
We are talking about 10-year horizons and countries where there is real economic or sectoral growth, not just inflationary growth. A classic example is the US stock market over the last hundred years. Or some other countries after the Second World War and up to now. How this growth is achieved and at what cost is another matter.
I don't see any investment trends.
I think the efficiency of the market lies only in the fact that the price does not stand still with information (news) and different ways of valuation on historical data, well, if the price does not stand still, then there are those who sell and those who buy, major players can probably assess buyers/sellers
I think that no one can predict what news the market will accept and what it will not, as major players (investment funds) have to prepare scenarios for both rises and falls, and then, as they say, it is a matter of technique - the main thing is for the price to move
with stocks and commodities it's like that
with currencies I cannot even guess why the price moves - it seems that the money is bought for equivalent cash, but it goes up and down.
Information for thought.
.
We call a purposive system whose behaviour pursues a goal formed by a supersystem: "to reach a given level", "to survive", "to win", etc. Mathematically, this is expressed by the fact that the system, of all possible states, adopts the states that provide an increase (preservation) of a certain state functional. This functional is a measure of purposefulness and is called efficiency. We use "definition by abstraction" (a classic example is the following definition: "The power of a set is the way in which sets are compared with each other").The contradictory properties of the concept of efficiency create certain difficulties in its understanding, interpretation and application. The contradiction is that, on the one hand, efficiency is an attribute of the system, and on the other hand, the assessment of efficiency relies on properties of the supersystem.