Alina Khay

Alina Khay

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Alina Khay
Alina Khay
Beyond the Efficient Market Hypothesis - Capitalizing on Modern Market Anomalies
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Beyond the Efficient Market Hypothesis - Capitalizing on Modern Market Anomalies

The Efficient Market Hypothesis (EMH), introduced by Eugene Fama in 1970, has long been a cornerstone of financial theory, asserting that asset prices fully reflect all available information.

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Alina Khay
Dec 03, 2024
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Alina Khay
Alina Khay
Beyond the Efficient Market Hypothesis - Capitalizing on Modern Market Anomalies
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The Efficient Market Hypothesis (EMH), introduced by Eugene Fama in 1970, has long been a cornerstone of financial theory, asserting that asset prices fully reflect all available information. This principle suggests that markets are inherently efficient, leaving no room for consistent outperformance. For decades, it served as a theoretical foundation for the rise of passive investment strategies, such as index funds, which aim to mirror market performance rather than exceed it.

Fast forward to 2024, and the financial landscape continues to test the limits of the EMH. Market anomalies, once considered exceptions, have grown increasingly prevalent in the face of new technologies, social dynamics, and trading strategies. High-profile events like the 2013 "flash crash," where the U.S. stock market plunged nearly 9% in minutes due to algorithmic trading and investor panic, exposed the fragility of the EMH's assumptions. More recently, disruptions caused by the 2021 GameStop short squeeze an…

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