The Religion of Investing - Level 3 Book

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  1. #1

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    The Religion of Investing - Level 3 Book

    Read an interesting line in a new book that landed in my mailbox and I thought I'd share, as this one stayed in my mind through a quick read.

    "It is almost as if efficient market hypothesis were a religion: At some point in your education you either accept it or deny it. If accepted, it becomes a matter of faith and from then on all evidence is forced into the model."


    This line is true about most things in life... even atheism.

    The book reviews are few and mixed. I tend to think AAII is also a "religious" organisation in terms of what they preach, the seductiveness of their portfolio results and the way they tend to promote their religion. ( Website: https://www.aaii.com?noembed )

    However good reading for those who are indexing and considering what to do next.

    https://www.amazon.com/Investing-At-.../dp/1883328292


  2. #2

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    Quote Originally Posted by shri:
    Read an interesting line in a new book that landed in my mailbox and I thought I'd share, as this one stayed in my mind through a quick read.

    "It is almost as if efficient market hypothesis were a religion: At some point in your education you either accept it or deny it. If accepted, it becomes a matter of faith and from then on all evidence is forced into the model."


    This line is true about most things in life... even atheism.

    The book reviews are few and mixed. I tend to think AAII is also a "religious" organisation in terms of what they preach, the seductiveness of their portfolio results and the way they tend to promote their religion. ( Website: https://www.aaii.com?noembed )

    However good reading for those who are indexing and considering what to do next.

    https://www.amazon.com/Investing-At-.../dp/1883328292
    I think there are two questions here:

    1. Is the market efficient?
    2. Is it efficient as far as I'm concerned?

    I don't think the market is efficient, which is to say that for someone with the right temperament and expertise its possible to outperform the market. Warren Buffett's performance has clearly shown that the market is not efficient.

    However from my perspective it might as well be efficient. I don't have the ability to exploit the market's inefficiencies, and if I attempt to I will likely end up underperforming. So from a practical point of view its efficient, at least as far as I am concerned.