I love to take a contrarian position. The more contrarian the better. But only if I truly think I am right. This post will be a lot of fun because these days you can’t get much more contrarian than defending Eugene Fama on the EMH. But I also happen to think Fama is right. Really, I do. Indeed I think I can show that he is right, or at least much more likely to be right than most people imagine.
Like most stock traders, I am skeptical of Fama’s Efficient Market Hypothesis. But it’s important to pay attention to those that disagree with you. It’s better to learn that you’re wrong than to stay wrong. I’m not sure I’m wrong, but the quoted Web page gives me pause. We are all prey to cognitive illusions.