Markets are efficient if and only if P=NP (2010)
Markets are obviously not efficient. The proof is trivial. Have you ever made a mistake? Congrats, that’s your proof. The market is a collection of people making decisions. People are capable of mistakes. People en masses are still people, and just as fallible, if not more. Thus, markets can and constantly do misprice things/inefficiently allocate capital.<p>These real events are incompatible with perfectly efficient markets:<p>* tulips<p>* Bitcoin<p>* google (billion dollar startups)<p>* crashes<p>* theranos<p>* salem witch hunts<p>that’s not to say markets are perfectly inefficient either. But they’re clearly fallible and imperfect. They clearly misinterpret available information all the time, even though they easily could’ve interpreted it correctly. Markets are full of emotion driven irrational actors, not Bayesian robotic egoless predictors, even though we like to pretend we’re the latter sometimes.