Earlier Views of Market Efficiency

Edward E. Williams and John A. Dobelman

Chapter 4 in A Random Walk to Nowhere:How the Professors Caused a Real “Fraud-on-the-Market”, 2020, pp 53-72 from World Scientific Publishing Co. Pte. Ltd.

Abstract: As we observed in Chapter 3, under semi-strong efficiency all publicly available information is supposed to be impounded in stock prices. As a consequence, the economic and financial analysis of securities is useless. A stock (bond, etc.) is “worth” what its present market price is. This always seemed an odd notion to the many people who earn a living examining corporate financial statements, talking to management, and generally trying to understand and determine the fundamental value of securities. The essence of the securities analyst was (and is) to look at present market prices in order to determine whether a security is correctly valued, undervalued, or overvalued…

Keywords: Efficient Market Hypothesis; Market Inefficiency; Mathematical Economics; Academic Finance; Real-World Markets; Fraud; Random Walk (search for similar items in EconPapers)
JEL-codes: B26 O16 (search for similar items in EconPapers)
Date: 2020
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