Market Sense and Nonsense

Part One: Markets, Return, and Risk

Chapter 1: Expert Advice

Comedy Central versus CNBC

The Elves Index

Paid Advice

Investment Insights

Chapter 2: The Deficient Market Hypothesis

The Efficient Market Hypothesis and Empirical Evidence

The Price Is Not Always Right

The Market Is Collapsing; Where Is the News?

The Disconnect between Fundamental Developments and

Price Moves

Price Moves Determine Financial News

Is It Luck or Skill? Exhibit A: The Renaissance Medallion

Track Record

The Flawed Premise of the Efficient Market Hypothesis: A

Chess Analogy

Some Players Are Not Even Trying to Win

The Missing Ingredient

Right for the Wrong Reason: Why Markets Are Difficult to

Beat

Diagnosing the Flaws of the Efficient Market Hypothesis Why the Efficient Market Hypothesis Is Destined for the Dustbin of Economic Theory Investment Insights Chapter 3: The Tyranny of Past Returns S&P Performance in Years Following High- and Low-Return Periods Implications of High- and Low-Return Periods on Longer- Term Investment Horizons Is There a Benefit in Selecting the Best Sector? Hedge Funds: Relative Performance of the Past Highest- Return Strategy Why Do Past High-Return Sectors and Strategy Styles Perform So Poorly? Wait a Minute. Do We Mean to Imply . . .? Investment Insights Chapter 4: The Mismeasurement of Risk Worse Than Nothing Volatility as a Risk Measure The Source of the Problem Hidden Risk Evaluating Hidden Risk The Confusion between Volatility and Risk The Problem with Value at Risk (VaR) Asset Risk: Why Appearances May Be Deceiving, or Price Matters Investment Insights