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by sova 2947 days ago
weak-form efficiency in markets means something special.
1 comments

Not really. It means that the market incorporates all past data.

This paper is entertaining but it depends on the assumption that computing power grows exponentially forever and will eventually be able to solve all P problems at negligible cost. That assumption is clearly not justified.

And the belief that any market perfectly incorporates data, not a single point off in any stock, is basically a strawman anyway.

I don't know! I'm wondering! Because weak-form efficient means something different than strong efficiency, which is what you say when the market perfectly incorporates all data. Just out of curiosity, if the data doesn't go into the market, where does it go? Strong econ minds believe that prices do incorporate all the data necessary for valuation
Sometimes data gets lost. People are making the decisions, and people are sloppy and lossy.

Weak and strong are just about which data is incorporated. Neither one addresses the fact that no entity interacting with a market is infallible.