Do you concur with Investopedia's characterization of the EMH? It sounds very similar to other explanations I've seen of it, though less...sophisticated...than yours.
Investopedia, unfortunately because I like to use it as a source for definitions and explanations, gets it precisely wrong. That the Efficient Market Hypothesis claims it's impossible for anyone to beat the market is as parodic as it gets.
Wikipedia does no better
The efficient market hypothesis (EMH) is an investment theory that states it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices.
, but to their (dis)credit, they're just copying off Investopedia, with a few word changes, or maybe the cribbing is in the other direction.
Morningstar does a little better in its glossary, but still says silly stuff:
attempts to outperform the market are essentially a game of chance rather than one of skill.
If I were trying to discredit a hypothesis whose implications would mean my boat's about to be repossessed, I'd pretend it made predictions that are clearly untrue, too. Fortunately for the EMH, it says no such thing:
Eugene Fama, who came up with the hypothesis in the first place, wrote:
The expected value is just one of many possible summary measures of a distribution of returns, and market efficiency per se (i.e., the general notion that prices "fully reflect" available information) does not imbue it with any special importance.
Who we gonna believe, the beeswax salesperson or the person who explained it properly?
Bumblebees, and I heard the legend no later than 1970, probably earlier, and the interesting part is the prefix bumble has been conserved, after all there are around 20,000 species of bees, and only about 250 qualify for the bumble moniker, as everybody knows can fly
, could all along, and the person who reputedly worked a few numbers out on the back of a napkin at a dinner party was proving they can't fly like airplanes, therefore they must do something else.
I don't think most bumble-bee pointer outers are consciously lying. I should think they're, probably innocently, repeating an untruth they heard from somebody they find credible
. Who wouldn't like to stick it to those uppity ivory tower scientists who know everything except common sense?
See any similarities to the EMH parody?