Comments on: Why I Believe the Efficient Market Theory Is Bunk

By: Millionaire Mommy Next Door

Millionaire Mommy Next Door — Thu, 17 Apr 2008 05:32:05 +0000

Count me in the behavioral finance camp, too. I was an index investor for awhile – until I learned how to exploit the herd mentality with momentum investing. Great post.

By: AJC @ 7million7years

AJC @ 7million7years — Wed, 16 Apr 2008 03:14:35 +0000

… so does Warren Buffet, Ben Graham, Pete Town, and little ol’ me.

It’s only BECAUSE businesses and markets are inefficient that I am financially where I am today.

Well said! AJC.

By: Ron

Ron — Wed, 16 Apr 2008 02:41:15 +0000

Thanks Daniel,

Oh well. I’m enjoying the banter back and forth! It’s good to have a civil discussion with someone that sees things differently.

Where did you find information on behavioral markets?

By: Daniel@youngandfrugal.com

Daniel@youngandfrugal.com — Wed, 16 Apr 2008 01:11:58 +0000

Not as much as I would have liked. My investment fund isn’t fully built yet. I’m still saving for my down payment on the house and didn’t want to risk anything. High yield savings account is my best bet for that chuck of money!

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By: Ron

Ron — Wed, 16 Apr 2008 00:39:48 +0000

Thanks Mike,
You’re exactly, precisely on target right! (in my opinion)
Graham says that in the short run, the market is a voting machine and in the long run a weighing machine. In the long run IT IS efficient, but that’s why you can outperform the market. Buy when it’s irrational and sell when it becomes rational again, doing what Buffet called “dancing in and out of the markets.”

Wow. Just when I think you’ll disagree with me, I turn around and agree with YOU. LOL!

For the record, ANW was mispriced in January…..I just dumped it for a 40 percent gain.