[anm89]

It's funny how this is so exactly the the "heuristic that is almost always right", that is right now at the top of the front page.

You're basically saying that the average state of the stock market and the economy is to be average and not non-average. Ok, that's true by definition. The point is that people who have even marginally better understandings of how it plays out in the tail events can make enormous amounts of money. Even those people would agree that the average case is for there not to be an issue.

Market's are efficient, thinking that that means they are always right is a drastic misunderstanding of what EMH says. Were markets right in mid 2008? Clearly not. And people were specifically calling for and profited off of what happened.

[ramblerman]

I don't think OP said the market can't do unexpected things, just that there is no information to act out of the ordinary.

Take your example 2008, how would you use that information from the past to time the stock market today? Unless you have some information the rest of us don't have, you could be sitting on S&P Put options for the next 10 years.

The (few) people who profited in 2008 realized the subprime mortgages were rotten to the core before any media or masses knew what a subprime mortgage was.

This isn't comparable to the information we all have today that covid is here, interest is high, and russia is teeing up the border, which is already priced in.

[anm89]

I think you are misunderstanding the concept of EMH. EMH doesn't say markets price some mythical society wide shared understanding of reality which only fails to be correct due to the speed at which it propagates. it simply prices all of the information (orders) into the market according to who is willing to make those orders, and at what volumes, which is generated entirely by individual actors who have assymentric information like the contrarians from 2008 you seem to be implying don't count for some reason. The information of those contrarians was efficiently priced at every point and yet the market was wrong for an extended period of time. there were financial institutions publishing this info as research. it wasn't some big secret. the market didn't price it because people didn't understand the arguments and therefore didn't act on it, just like today.

>This isn't comparable to the information we all have

there's no set of information we all have. plenty of people don't believe covid is real, and that russia is run by reptilian aliens. Markets efficiently value their "knowledge" just as much as anyone else's.

[ramblerman]

> because people didn't understand the arguments and therefore didn't act on it, just like today.

This is the point though. Like what today?

If you have some theory why the Market is mispriced I'm all ears, but saying "plenty of people don't believe covid is real, and that russia is run by reptilian aliens" isn't really an argument.

You are the one making the case that everyone else is wrong, so the burden of proof lies with you.