In an absolutely efficient market, the price of an item will exactly reflect the true value of an item. If oil cost $65 a barrel to suck out of the ground, package, and ship, then it is definitely worth $65 a barrel. And that's what it'll sell for.
An inefficient market represents the opposite: a market where price doesn’t indicate true value. On the far end of inefficiency, prices would approach near randomness. Think: market bubbles...very inefficient markets. Involving tulips that cost more than a house, or situations where you plan to retire on your collection of first-run, still-in-original-package Star Wars toys.
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Finance: What is Efficient Markets Theor...141 Views
Finance a la shmoop what is the efficient markets theory well
there should just be a big picture of Warren Buffett right here it should be [Two men carrying a framed picture of Warren Buffett]
the man Warren explaining the efficient market theory himself and that theory
states that it's impossible to beat the market over a sustained period of time
it should be Warren Buffett who explains that all relevant information comes [Warren Buffett giving a presentation on stage]
public in public stocks and that the market more or less immediately
incorporates all that information in its pricing
hence nobody can ever beat the market over a long period of time so why should [Men falling asleep during a presentation]
Warren Buffett be giving this little definition because the efficient market
theory is wrong Buffett has beaten the market for decades in a row in every way [Warren Buffett beating up the market with a stick]
shape and form so you have a really memorable huge figure in finance this
guy and then pipsqueak professors who are kind of a laughing stock whenever the [Professor jumping on the microphone stand trying to talk]
wealthy power crowds gather in Omaha for their National Convention that's what
they say at the Woodstock of Finance if you will fortunately most people keep [Man with arms folded standing naked in a corridor]
their clothes on for this one
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