Comments on: Efficient Market Hypothesis http://www.personalfinanceplaybook.com/2009/03/efficient-market-hypothesis/ A Personal Finance & Investing Resource Tue, 27 Jul 2010 19:47:58 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Todd http://www.personalfinanceplaybook.com/2009/03/efficient-market-hypothesis/comment-page-1/#comment-371 Todd Mon, 09 Mar 2009 15:16:41 +0000 http://www.personalfinanceplaybook.com/?p=528#comment-371 While I agree that having access to management gives you an advantage, I think there's more to it than that. Most large portfolio managers can gain access to employees. It definitely is an advantage pros have over amateurs though. Another advantage lies in the fact that Buffett often buys entire companies. Special situations often lead to mispricing. Small cap stocks are more often mispriced due to fewer analysts following them. I agree that it is very difficult for non-professional investors to spot these situations and profit from them. I don't think it's impossible, though. Thanks for commenting. While I agree that having access to management gives you an advantage, I think there’s more to it than that. Most large portfolio managers can gain access to employees. It definitely is an advantage pros have over amateurs though. Another advantage lies in the fact that Buffett often buys entire companies. Special situations often lead to mispricing. Small cap stocks are more often mispriced due to fewer analysts following them. I agree that it is very difficult for non-professional investors to spot these situations and profit from them. I don’t think it’s impossible, though. Thanks for commenting.

]]> By: the weakonomist http://www.personalfinanceplaybook.com/2009/03/efficient-market-hypothesis/comment-page-1/#comment-370 the weakonomist Mon, 09 Mar 2009 12:35:54 +0000 http://www.personalfinanceplaybook.com/?p=528#comment-370 In the long-term I believe the market is effecient, which is why I don't waste time trading stocks. I too was convinced by the Random Walk theory. People like Buffett though are able to buy long-term investment they believe in because they've met the management and employees of the company. This is just as important as looking at an income statement, and it's not something most of us can do. Good post. In the long-term I believe the market is effecient, which is why I don’t waste time trading stocks. I too was convinced by the Random Walk theory.

People like Buffett though are able to buy long-term investment they believe in because they’ve met the management and employees of the company. This is just as important as looking at an income statement, and it’s not something most of us can do. Good post.

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