How to Think Like Benjamin Graham and Invest Like Warren Buffett

42 FIGURE 3-5 Simulated weather system time series. FIGURE 3-6 Simulated weather system phase space: ‘‘strange attractor.’’ ...

ChaoticMarket 43 Take a look at Figures 3-5 and 3-6. Figure 3-5 depicts the time series of a simulated weather system, suggestin ...

44 ATaleofTwoMarkets LEs were created for use in connection with information theory, to specify the likelihood that information ...

ChaoticMarket 45 geometry was developed, however, these integral dimensions were all wehadtogoon. Fractal geometry was developed ...

46 ATaleofTwoMarkets turned out to be fractals. Japan’s was 3.05; Germany’s, 2.41; and the United Kingdom’s, 2.94. That is stron ...

ChaoticMarket 47 The speed of intrinsic time may differ from that of chronological time. Price changes would then move ahead of ...

48 ATaleofTwoMarkets show that market behavior is far more complex than EMT allows. While that is bad news for market efficiency ...

ChaoticMarket 49 (bouncing around) in price changes in contrast to remarkable smoothness in the cash stream. Shiller and his col ...

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51 Chapter4. Amplified Volatility T he efficient market story and the chaotic market story are neither exhaustive nor mutually e ...

52 ATaleofTwoMarkets The efficient dimension of information volatility is simply the market’s facilitation of price changes in t ...

AmplifiedVolatility 53 information flows produce fountains of high-quality information along with a deluge of low-quality jun km ...

54 ATaleofTwoMarkets The hoax was engineered by a former employee of a press service who knew the ropes of getting releases onto ...

AmplifiedVolatility 55 The most innocuous form of the ris kof negative information volatility is the rumor mill—Internet posting ...

56 ATaleofTwoMarkets the kind lots of 2000s maniacs salivate for: no earnings and no rev- enue, though most of them also had no ...

AmplifiedVolatility 57 They then spent the weekend on computers at UCLA bombarding three popular finance message boards—Yahoo!, ...

58 ATaleofTwoMarkets stoc kas to sell it short, the pump-and-dump scheme can be run just as easily as a bust-and-buy scam. The b ...

AmplifiedVolatility 59 but that negative information volatility will result. That bad news for market efficiency is not entirely ...

60 ATaleofTwoMarkets stocks at a lower price (called the bid) and selling them at a higher price (called the ask). The differenc ...

AmplifiedVolatility 61 one seeking to buy 100 shares of Dell at $50 and one seeking to sell the same. When the price of an offer ...