Chapter 10. Market Efficiency. Warren Buffet. "I\'d be a bum on the street with a tin cup if the markets were always efficient" ….”Observing correctly that the market was frequently efficient, they went on to conclude incorrectly that it was always efficient.". Learning Objectives.
“Efficient Markets theory is elegant but flawed, as anyone who lived through the booms and busts of the 1990s can now see. The old financial orthodoxy was founded on two critical assumptions in Bachelier’s key model: Price changes are statistically independent, and they are normally distributed. The facts, as I vehemently argued in the 1960s and many economists now acknowledge, show otherwise.”