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Benoit Mandelbrot on Efficient Markets


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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Efficient Markets: Killing Off the Monster

From the Economist:

Having lived through the financial crisis of 2007-08, the man in the street might find the idea that markets are “efficient” incredible. But the efficient-market hypothesis, like a Hollywood monster, has proved very hard to kill off. From the truism that the average investor could not beat the market after costs, academics developed the insight that obvious market-beating opportunities would quickly be arbitraged away.

Here is a great example of efficient markets — not:

That chart could only have been effectively traded as a trend following trader. You used fundamentals to trade that? You are full of it or you were flipping coins and hit heads.


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Efficient Market Bullshit

I love it when people tell me the trend following ‘winners’ are the lucky survivors. In my humble opinion people who think like that are either ignorant in the short-term willing to learn/be corrected or, and I say this bluntly, losers in life unable to accept reality. If trend following winners are the lucky monkeys hitting the keyboards, than the king of the monkeys must be Warren Buffett. Buffett himself makes the case for why this is bullshit (there is no other word) in an excerpt from Snowball:

Part 1
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Part 4
Part 5
Part 6

Book excerpt idea courtesy of BreakoutStocks.