Tag Archive: University of Chicago


Economic commentators are disappointingly short on metaphors. New economic figures released last week prompted a slew of blogarticles asking whether or not India’s economy had “turned a corner,” “cleared the woods” or begun sprouting “green shoots.” After a turbulent summer – and against the backdrop of a lingering global downturn, looming general election and a booming China – it’s no surprise that Indians, and investors, are desperate for signs that the country’s economy is “back on track.”

As the global markets flopped at the end of last week under the repeated threat of the Federal Reserve removing its support for the US economy, one market decided to go the other way – IndiaContinue reading

It’s always difficult to post the latest event and findings, just to put it in prospective. Is there anything in the Indian papers worth blogreading today? Or shall wait 4 the outrage to surface it?

Sharing two of the contrary indicators and psychology of Efficient Market Hypothesis and Black Swan that I have taken from the reformed broker and Hedgeye blog.

Sometimes it can be the Black duck

 “The trouble with the Recency Effect is that everyone all of a sudden thought they were Nassim Taleb, ornithological experts on the spotting of Black Swans. Every blip on the screen or blurb in the newspaper was fresh evidence of the next hundred years’ storm. Forget being fooled by randomness, people have become obsessed with randomness. Continue reading

It’s always difficult to post the latest event and findings,just to put it in prospective. Is there anything in the Indian papers worth reading today? imagesOr shall wait 4 the outrage to surface it?

Sharing two of the contrary indicators and psychology of Efficient Market Hypothesis and Black Swan, that I have taken from The reformed broker and Hedgeye blog.

Sometimes it can be the Black duck

“The trouble with the Recency Effect is that everyone all of a sudden thought they were Nassim Taleb, orinthological experts on the spotting of Black Swans. Every blip on the screen or blurb in the newspaper was fresh evidence of the next hundred years’ storm. Forget being fooled by randomness, people have become obsessed with randomness.  Continue reading

John C. Bogle the renowned name in the mutual funds shared some thoughts long back saying Whatever the form of theA EMH, I know of no serious academic, professional money manager, trained security analyst, or intelligent individual investor who would disagree with the thrust of EMH: The stock market itself is a demanding taskmaster. It sets a high hurdle that few investors can leap.

University of Chicago Professor Eugene F. Fama had performed enough analysis of the ever-increasing volume of stock price data to validate this “random walk” hypothesis, rechristened as the efficient market hypothesis (EMH). Today, the intellectual arguments against the EMH religion are few. The church, however, has three different dogmas. Princeton Professor Burton Malkiel describes them: the weak form (stock price changes over time are statistically independent); the semi-strong form (prices quickly reflect new value-changing information); and the strong form (professional managers are unable to accurately forecast the future prices of individual stocks). Continue reading

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