Читать книгу Taming the Lion - Richard Farleigh - Страница 13

I often think of the market as an opponent, a living being to outwit and defeat. To ‘beat the market’ we need to look for weaknesses in our opponent’s armoury. The problem is that our opponent is nearly perfect. It is very ‘efficient’ at setting prices that offer no opportunities. If we buy and sell on just whims, or on unfounded ideas, we cannot win the battle.

Efficiency in markets is a concept stemming from economics. Quite simply, an efficient market is unbeatable. It sets a price whereby you may as well toss a coin to decide whether to buy or sell. At any time, the price completely reflects all relevant information. There is no point taking the view that because of factor X, a market is undervalued; factor X is already known and factored into the current price.