12 Basic Stock Investing Rules (8)

Efficient Market Hypothesis


There are many important things you need to know to trade and invest successfully in the stock market or any other market.

12 of the most important things that I can share with you based on many years of trading experience are enumerated below.


8. The Efficient Market Hypothesis is fallacious and is actually a derivative of the perfect competition model of capitalism.

The Efficient Market Hypothesis at root shares many of the same false premises as the perfect competition paradigm as described by a well known economist.

The perfect competition model is not based on anything that exists on this earth.

Consistently profitable professional traders simply have better information - and they act on it.

Most non-professionals trade strictly on emotion, and lose much more money than they earn.

The combination of superior information for some investors and

the usual panic as losses mount caused by buying high and selling low for others, creates inefficient markets.




By C.C. Collins