How to Think Like Benjamin Graham and Invest Like Warren Buffett

22 ATaleofTwoMarkets dents of the random wal kmodel (and EMT) recognize based on the foregoing analysis. They are nonsense not b ...

ProzacMarket 23 model was implying: Prices of shares in stoc kmar kets should adjust instantaneously and accurately to new infor ...

24 ATaleofTwoMarkets available; and the strong form (hold your breath) says that stock prices fully reflect all existing informa ...

ProzacMarket 25 market returns, with the apotheosis being the insider trading scan- dals of the 1980s. Since the strong form of ...

26 ATaleofTwoMarkets The quality of information digested by the market may be just as low as the quality of information that goe ...

ProzacMarket 27 and cannot be sure that investor sentiment will not change adversely at any time.^14 Evidence of the noisy inves ...

28 ATaleofTwoMarkets parent underreaction to information, and the likelihood of abnormal returns continuing after an event are a ...

ProzacMarket 29 ments is not necessarily the weighted sum of the risks (or dispersion in the returns) of the individual investme ...

30 ATaleofTwoMarkets the stock’sβ(beta). Under CAPM, stocks with higherβ’s are more risky than are stocks with lowerβ’s because ...

ProzacMarket 31 horizons. The patent dubiousness of these requirements recently has become an important aspect of the literature ...

32 ATaleofTwoMarkets a business has experienced as grounds for gauging its future business performance. The earnings and cash fl ...

33 Chapter3. Chaotic Market T oday’s investor can learn something from the elite group of No- bel Prize winners who brought us t ...

34 ATaleofTwoMarkets ing of stoc kmar ket behavior and how investors and managers should think about markets and market prices. ...

ChaoticMarket 35 understanding of public capital market phenomena with a broader perspective on investor and market behavior. Th ...

36 ATaleofTwoMarkets ative or persistent: if the system has moved up for a number of observations, it is more likely to continue ...

ChaoticMarket 37 publication of a volume in 1988. It has been carried into the realm of “phynance”—the merger of physics and fin ...

38 ATaleofTwoMarkets may make the difference between a tornado occurring or not occur- ring in another part of the world.”^5 Pic ...

ChaoticMarket 39 FIGURE 3-1 Driven pendulum time series. force. It will swing bac kand forth at a steady speed and not come to r ...

40 ATaleofTwoMarkets FIGURE 3-2 Driven pendulum phase space: ‘‘limit cycle at- tractor.’’ described, but this line’s height woul ...

41 FIGURE 3-3 Undriven pendulum time series. FIGURE 3-4 Undriven pendulum phase space: ‘‘point attrac- tor.’’ ...