Market Personification

[dimpy.handa]

On the one hand we have some who are advocates of the strong form of the Efficient Market Hypothesis which basically states that markets are rational. The price of any given security at any moment is the markets' assessment of the intrinsic value of that security based on all known data. Any unusual profits made is per chance, and it is impossible to beat the market with any level of consistency.

On the other hand we have others who basically state that markets are irrational. Market price fluctuations are attributed to excessive greed and fear which occasionally result in a convergence between price and value on any given securities advancement or retreat. Benjamin Graham refers to the manic-depressive Mr. Market, who alternates between wild optimism and severe pessimism, offering to both buy and sell you whatever securities at wildly fluctuating prices, with profit's to be made from Mr. Market's irrationality.

 

[swatiraohnlu]

In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient". That is, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information publicly available at the time the investment is made.