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Eugene F. Fama: 2 ideas worth knowing

2 ideas from Eugene F. Fama, each explained in a minute and credited to the original work. Free on Savvy.

• The market that supposedly already knows everything

  In 1970, economist Eugene Fama formalised the efficient-market hypothesis: stock prices instantly reflect all available information, making it near-impossible to consistently beat …

  — Eugene F. Fama, Efficient Capital Markets: A Review of Theory and Empirical Work

• If a stock price pattern were reliably profitable, the theory says it'd already be gone

  Eugene Fama argued that asset prices fully reflect all available information at any given time, so consistently beating the market through analysis alone should be impossible, sinc…

  — Eugene Fama, Efficient Capital Markets: A Review of Theory and Empirical Work

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