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Efficient Market Hypothesis Nobel Prize

Sam Ro, BI, Nobel Prize Winner Eugene Fama Explains Why You Have No Chance of Beating The Market, here. The cat puked on my FIOS box and killed my internet for  the weekend.

“Beginning in the 1960s, Eugene Fama and several collaborators demonstrated that stock prices are extremely difficult to predict in the short run, and that new information is very quickly incorporated into prices,” they explained. “These findings not only had a profound impact on subsequent research but also changed market practice. The emergence of so-called index funds in stock markets all over the world is a prominent example.”

It is extremely difficult to predict when and where the cat is going to puke – the lesson here is put your FIOS box upright/vertical so the cat cannot sit on it. As for predicting short term  market prices, look into using computers for that, I hear it helps.

Magnusson, Miller, & Zumbrun, Bloomberg, Fama, Shiller, Hansen Win 2013 Nobel Prize in Economics, here.

Their work spans almost 50 years of research, beginning with Fama’s finding that it’s difficult to predict price movements in the short run, a conclusion that contributed to the development of stock-index funds. Later work by Shiller and Hansen focused on longer-run price swings and the extent to which they could be explained by such fundamental features as dividend payouts on stocks and the risk appetite of investors.The awards are a “very interesting collection because Fama is the founder of the efficient market theory and Shiller at least is one of the critics of it,” said Robert Solow, winner of the Nobel economics prize in 1987 and professor emeritus at the Massachusetts Institute of Technology in Cambridge.

Barry Ritholtz, The Big Picture, Shiller’s Financial Markets Course (Open Yale Courses) , here.

Professor Shiller provides a description of the course, including its general theme, the relevant textbooks, as well as the interplay of his course with Professor Geanakoplos’s course “Economics 251–Financial Theory.” Finance, in his view, is a pillar of civilized society, dealing with the allocation of resources through space and time in order to manage big and important risks. After talking about finance as an occupation, he emphasizes the moral imperative to use wealth for the purposes of philanthropy, in the spirit of Andrew Carnegie, but also of Bill Gates and Warren Buffett. Subsequently, he introduces the guest speakers David Swensen, Yale University’s chief investment officer, Maurice “Hank” Greenberg, former Chief Executive Officer (CEO) at American International Group (AIG) and current CEO of C.V. Starr & Co. and of Starr International, and Laura Cha, former vice chair of the China Securities Regulatory Commission, member of the Executive Council of Hong Kong and of the government of the People’s Republic of China, and director of the Hong Kong Shanghai Banking Corporation (HSBC). Finally, he concludes with a description of the topics to be discussed in each lecture.

00:00 – Chapter 1. Introduction to the Course
06:12 – Chapter 2. Broader Context of the Course
22:41 – Chapter 3. Finance as an Occupation
30:40 – Chapter 4. Using Wealth for a Purpose
40:30 – Chapter 5. Outside Speakers and Teaching Assistants
50:26 – Chapter 6. Outline of the Lectures

Complete course materials are available at the Open Yale Courses website: http://oyc.yale.edu

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