Inefficient Financial Markets

Today Apple Computer was down 13% on a less than perfect earnings report. Netflix was up 40% because they earned $0.13 per share when they were expected to report a small loss. What do these wide one day price swings mean? The world’s financial markets are not working efficiently. In an efficient market wide daily swings in well publicized stocks do not occur. By the time an announcement is made investors have figured things out for the most part and the sudden drastic changes do not occur. What is wrong with investors? Well, for the most part, investors are not trading. The world’s largest financial institutions dominate trading and they are gambling. The eventual consequences of this will be nothing short of awful. Just be warned.

Expected Seasonal Pattern Compared To Actual Trading
Historical Statistics

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