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130 sats \ 1 reply \ @denlillaapan 10 May \ on: SN Saturday Newsletter 5/10/25 meta
MONEY CLASS OF THE DAY: Market Efficiency: You Come Into MYYYYY HOUSE?! @denlillaapan explains market efficiency, the efficient market hypothesis, and the joint hypothesis problem. 5.8k sats \ 31 comments \ @denlillaapan
Very nice summary @k00b, (and it's lovely to see you work through it in real time). Just a slight adjustment: the two hypotheses advanced in the EMH/joint-hypothesis problem are:
  • Asset pricing model is correct
  • market efficiency.
...because, of course, what you're saying when you're saying that something is under-/overvalued is that the market isn't efficient, since it is mispricing this one thing.
edit: then I kept listening and you re-stated it that way. THANKS!
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92 sats \ 0 replies \ @k00b OP 10 May
It's a tricky thing! You explained it so well that the best way for me to explain it was exactly as you did.
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