This is a common objection, "It's already priced in". I've believed it for a long time, but also been really interested in the claim, since it feels recursive in the kind of suspicious way. Recently I read / watched a lot of material about it, just out of personal interest. In short, this claim (the efficient market hypothesis, "It's already priced in") is very optimistic. It's not possible to prove definitively if it is or isn't true, and people will argue both ways. However, it seems very unlikely that _all_ effects are _always_ already priced in. Some evidence by way of contradiction:
1. It's widely known that Spacex is overvalued. How is it possible for it to be widely known, and yet still overvalued? Either it is fairly valued, or these issues are _not_ already priced in.
2. If people read Enron's filings, they could have been aware of the shady reporting, and should have seen the reduction in price coming. But clearly most did not! Enron persisted for a long time despite shady tactics, that essentially were happening "in the open" if you dug into the paperwork.
3. The same argument can be made about housing loans during 2008, the dot com boom in 2000, and the response to covid in 2020
If you're interested I have much more to say on the topic! It's fascinating and I've only recently been convinced that the efficient market hypothesis is untrue (or at least it is suspect). I also highly recommend any of patrick boyle's videos, he makes great content often touching on this topic.
disclaimer: I'm not an expert in this industry, or really in this industry at all. I just like learning about it.
There was an article on Hacker News just the other day explaining that no one knows what the value of these used GPUs are going to be and that people underwriting are just, essentially, just guessing.
1. It's widely known that Spacex is overvalued. How is it possible for it to be widely known, and yet still overvalued? Either it is fairly valued, or these issues are _not_ already priced in.
2. If people read Enron's filings, they could have been aware of the shady reporting, and should have seen the reduction in price coming. But clearly most did not! Enron persisted for a long time despite shady tactics, that essentially were happening "in the open" if you dug into the paperwork.
3. The same argument can be made about housing loans during 2008, the dot com boom in 2000, and the response to covid in 2020
If you're interested I have much more to say on the topic! It's fascinating and I've only recently been convinced that the efficient market hypothesis is untrue (or at least it is suspect). I also highly recommend any of patrick boyle's videos, he makes great content often touching on this topic.
disclaimer: I'm not an expert in this industry, or really in this industry at all. I just like learning about it.