[tinymollusk]

What's the evidence that learning/adaptation happens in a positive direction in markets? Without the directionality indicator, it sounds more like "this system has changed" rather than "this system has improved".

Also, the positive assertion that markets learn/adapt requires evidence more than the negative. The default assumption should be that the market changes randomly.

[CryptoPunk]

>>What's the evidence that learning/adaptation happens in a positive direction in markets?

The superior economic growth rates seen in countries with more economic freedom.

There's also the work done by Andrew Lo showing markets adapt and learn:

http://mitsloan.mit.edu/newsroom/articles/why-financial-mark...

>>Also, the positive assertion that markets learn/adapt requires evidence more than the negative. The default assumption should be that the market changes randomly.

I don't see the basis of assuming markets change randomly. Markets are composed of individuals who adapt and learn, and in a free market, theory would suggest people will adapt to configurations that tend to be mutually beneficial.

The market process of profit and loss also rewards better utilizers of capital with more capital, and less effective utilizers with less, so one would expect the market to evolve to become more effective at utilizing capital.

[tinymollusk]

My thought is that unless proved otherwise, the default assumption should not be "signal", it should be "noise".

There is little evidence that modern finance is a free market, or that (macro)-economic theory is all that good at making predictions.

Finally, this may be something we have to agree to disagree on. I look at financial markets and see too much irrational behavior and impossibly complex systems to make accurate predictions on. Without predictions we can test and verify, I don't place much faith in untested assertions, especially since the loudest voices tend to monetize giving advice like this.

Markets are predictable until they aren't. Economics has some interesting things to say about the behavior of people's rationality, but I have yet to be convinced that faith in the free market is anything more than seeing imaginary patterns in a complex system combined with survivorship bias.