Published Tuesday, July 24, 2007 by Frank Shostak
An old economics joke goes like this, writes Frank Shostak. A person is walking along and says to an economist, look, there is a $20 bill on the sidewalk. The economist disputes it without looking, on grounds that if it were there, someone else would have already picked it up. It's funny but it is also not far from describing a widely held view that financial asset markets always fully reflect all available and relevant information, and that adjustment to new information is virtually instantaneous.
(Original Text)
Are Profits Purely Random? (1.61 MB)