The Myth of the Rational Market

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…n exactly the case the author describes. A few arbitrageurs in a very misinformed crowd won't correct the price. Anyway, I know all this because I just finished the book The Myth of the Rational Market, by Justin Fox. It's the biography of the idea, from a tentative observation to dogma to just one tendency of the market among many. At least the way Justin Fox tells the story, the stronger versions of the efficient market hypothesis just don't have a lot of evidentiary support anymore. Yes, markets try to get it right. But they can be persistently wrong in ways that efficient-market theorists think should only happen once in hundreds of thousands of years. This has happened multiple times just in the last 20 years. Perhaps that information hasn't been efficiently disseminated to the WSJ yet.