“I think over my career, the market…has gotten less, not more, efficient.” - @CliffordAsness
@TheIdeaFarm @CliffordAsness The market becoming less efficient over time ties in with Steve Hou’s idea of market becoming less susceptible to large drawdowns as wealth inequality increases. Very wealthy individuals can afford to lose more in markets and are less likely to sell because of negative research
@TheIdeaFarm @CliffordAsness The market becoming less efficient over time ties in with Steve Hou’s idea of market becoming less susceptible to large drawdowns as wealth inequality increases. Very wealthy individuals can afford to lose more in markets and are less likely to sell because of negative research
@TheIdeaFarm @CliffordAsness Mental focus and understanding is the key to solving problems.
@TheIdeaFarm @CliffordAsness Markets are way more greedy nowadays
@TheIdeaFarm @CliffordAsness Because the market has turned into more of a game rather than a method of price discovery. People are learning the rules, and few of them have to do with pricing a stock/asset correctly.
@TheIdeaFarm @CliffordAsness How much is behavioral vs. structural flows? Do you give any credence to the idea that the explosion of option volume has increased the influence of hedging flow on the indices
@TheIdeaFarm @CliffordAsness With respect Cliff, (unregulated) markets are more efficient now than ever. Think of the old Jesse Livermore days when you had an “edge” if you had a telephone to London.
@TheIdeaFarm @CliffordAsness The lack of susceptibility of wealthy people to sell even as negative research/news becomes increasingly apparent is the biggest contributing factor to the market being less efficient today compared to the 1970s when wealth inequality was lower and losses were more costly
@TheIdeaFarm @CliffordAsness How about less efficient but for shorter periods of time?