If financial markets are efficient then why do we try and predict them?

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foodbooty
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#1
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#1
Thinking along the lines of efficient market hypothesis.
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tazarooni89
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Are they efficient, though?
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foodbooty
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(Original post by tazarooni89)
Are they efficient, though?
I think we have to make our own judgment on whether we think they are efficient or not.
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Extremotroph
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Is there really anything efficient in the concept of profit?

- The incentive to increase "efficiency"
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WarrenBuffett
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define efficient first?
Can something constantly varying actually be efficient?
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tazarooni89
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(Original post by foodbooty)
I think we have to make our own judgment on whether we think they are efficient or not.
My judgement would be that they're not - some people have made a living from exploiting inefficiencies in the financial markets.
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Cornelius
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The theory is that, at any given point in time, the price of a stock couldn't possibly be undervalued or overvalued (in the sense that someone, somewhere would be willing to pay more or less for it than is currently priced by the markets). The implication being ofc that you can't really make a profit either by selling overvalued assets or buying undervalued assets.

I quite seriously believe the correct response to the EMH is this:

"Lol"
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