Investing 4.0—Efficient Markets and Value-Agnostic Indexing

Gary Smith () and Margaret Smith ()
Additional contact information
Gary Smith: Pomona College

Chapter Chapter 4 in The Power of Modern Value Investing, 2023, pp 67-83 from Springer

Abstract: Abstract The efficient market hypothesis states that stock prices take into account all relevant information. If changes in stock prices depend solely on new information, which is unpredictable, then stock prices follow a random walk and trying to predict changes in stock prices is a waste of time: the stock market doesn’t leave $100 bills on the sidewalk. The popularity of the efficient market hypothesis underlies the growth of index funds that do not try to beat the market. There is, however, plenty of evidence that stock prices do sometimes depart from intrinsic values—most obviously during bubbles, including the recent dot-com and cryptocurrency bubbles.

Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-45900-9_4

Ordering information: This item can be ordered from
http://www.springer.com/9783031459009

DOI: 10.1007/978-3-031-45900-9_4

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().