efficient-market

He seems genuinely surprised by this, and he offers three examples of what he calls "folk wisdom" about the crisis that lack, he notes, empirical evidence: that investors were led astray by devotion to the efficient-market hypothesis, particularly on real estate; that Wall Street pay focused on short-term trading profits rather than long-term incentives; and that investment banks boosted their leverage in the years leading up to the crisis.

Robert Teitelman: Andrew Lo and the Wisdom of Reading 21 Crisis Books Robert Teitelman 2012

He seems genuinely surprised by this, and he offers three examples of what he calls "folk wisdom" about the crisis that lack, he notes, empirical evidence: that investors were led astray by devotion to the efficient-market hypothesis, particularly on real estate; that Wall Street pay focused on short-term trading profits rather than long-term incentives; and that investment banks boosted their leverage in the years leading up to the crisis.

Robert Teitelman: Andrew Lo and the Wisdom of Reading 21 Crisis Books Robert Teitelman 2012

Atkeson and Simon unfortunately seem to be using market insight developed during the 1970s when Eugene Fama's efficient-market hypothesis ruled economic thinking.

Bank Stock Prices, Volatility and the Economy Ahead 2011

He seems genuinely surprised by this, and he offers three examples of what he calls "folk wisdom" about the crisis that lack, he notes, empirical evidence: that investors were led astray by devotion to the efficient-market hypothesis, particularly on real estate; that Wall Street pay focused on short-term trading profits rather than long-term incentives; and that investment banks boosted their leverage in the years leading up to the crisis.

Robert Teitelman: Andrew Lo and the Wisdom of Reading 21 Crisis Books Robert Teitelman 2012

The efficient-market hypothesis, which argued that smart investors would be on their own guard against undue risk, lost face during the subprime mortgage crisis.

At IMF, the hunt for a new consensus 2011

The efficient-market hypothesis was once a fertile idea, only to morph into policy, then ideology.

Robert Teitelman: Transactions: Oct. 18, 2010 Robert Teitelman 2010

A kick in the teeth for efficient-market theorists?

Overheard 2011

The original dartboard contest premiered in the daily Wall Street Journal in 1988, with the intention of testing the "efficient-market theory," popularized by Princeton University economics professor Burton Malkiel in his 1973 book, "A Random Walk Down Wall Street."

Pick a Stock for Contest 2011

The original dartboard contest premiered in the daily Wall Street Journal in 1988, with the intention of testing the "efficient-market theory," popularized by Princeton University economics professor Burton Malkiel in his 1973 book, "A Random Walk Down Wall Street."

Make Your Stock Pick for the Latest Contest 2011

I am not an efficient-market cultist: I don't think the market is always right, all the time.

Lessons From the Galleon Insider-Trading Case Cristina Lourosa-Ricardo 2011