Are the Markets Really Efficient?

Warren Buffett has always been open about his approach to investing, singing the praises of focusing on business fundamentals to find strong stocks at good prices. However, in a recent BloombergView article, columnist Noah Smith outlines some reasons why the Buffett philosophy actually contradicts the efficient market hypothesis (EMH), an investment theory that says it’s impossible to beat the market because existing share prices reflect all relevant information. A recent debate between University of Chicago finance… Read More

Technology and a Decline in Economic Growth

Stony Brook finance professor Noah Smith briefly critiques Northwestern University professor Robert Gordon’s argument that “the golden days of growth are over” in a recent BloombergView post. Smith summarizes Gordon’s recent book as arguing that a few key technological inventions catapulted growth from 1870 to 1970, but that the low-hanging fruit is now gone and so growth has necessarily slowed. Smith makes two arguments and one additional background point in response. The background point is… Read More