Congratulations ‒ You Have Finished Chapter 6 ‒ Efficient Market Theory: “Who Can Beat the Market?"
You have reached the end of chapter 6, Efficient Market Theory: “Who Can Beat the Market?”. In this chapter and the chapter 6 Canvas module, class website, and Introduction to Investments Discussion Forum, you have:
- Been introduced to the concepts and theories of market efficiency
- Discussed the difficulties involved in "beating the market"
- Examined market manias, also known as bubbles, and market crashes, also known as panics, and the behaviors and the common weaknesses that typical investors exhibit
- Reexamined the advantages and disadvantages active management and passive management, also known as index investing
- Reviewed famous and infamous investors and their characteristics
- Been introduced to some famous myths and stupid sayings
You should now be able to:
- Identify the three main efficient market hypotheses and the random walk hypothesis
- Describe the characteristics of market manias, also known as bubbles, and market crashes, also known as panics, and the behaviors of and common weaknesses that typical investors exhibit
- Describe the characteristics of intelligent, prudent, long-term oriented investors during manias and crashes
- Compare and contrast passive management investing, also known as index investing, versus active management investing
- Discuss some of the more famous investors and their characteristics
- Relate various famous market myths and stupid market sayings
Get Ready for Some Real Silliness
In chapters 4 and 5, we examined Fundamental Analysis. Fundamental Analysis is not easy but it is the best method for identifying potential prudent, successful, long-term oriented stock investments, in our humble opinion. In this chapter, we examined the Efficient Market Theories and some remotely rational and some downright silly strategies. For our last chapter on stocks, we are going to examine the third major form of analysis, Technical Analysis. Get ready for some real silliness!