During discussion about things where you had strong opinions and then changed your mind, someone mentioned EMH. Do you believe in EMH and if so is it strong or weak version?
I used to believe EMH but not strongly. The pandemic changed my view because I managed to invest some money when the stock market dived and was clearly influenced by overly pessimistic view of the impact of covid. Some might argue that the market reacted to the irrational government measures, so it is not that the case that the market was mistaken. I still think that investors were equally irrationally pessimistic. I reject the view that this is a hindsight and I was merely lucky. I am not big expert and I did not possess any proprietary information. I had the same information as everybody else, I just didn't let my emotions take over me. This is further confirmed that even today when all the events have passed exactly as predicted, majority of people still maintain their mistaken views that covid was very dangerous to young and non-risk population.
It is the only time when I saw the rest of the society to be so wrong in their views and clearly this was my once-a-lifetime chance. I haven't see any other opportunities for easy money so far but I think that people who are experts in their fields and investors might have been able to find more opportunities.
One of them was found by Michael Burry who definitely saw that the 2008 financial crisis was coming. He wasn't just lucky because he had read and analysed all the documents and had to create special investment instruments to profit for it. In this way, it wasn't easily accessible by laypersons like me who have no time or understanding about investment. Again, most professionals were blinded by collective frenzy.
What is your opinion about EMH?
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Notes -
That precisely is my understanding too. But why not play the market with the same attitude in every case? I saw a big issue of market going into the wrong direction without being an expert in this because it was so obvious. But many people are experts and they know about about multiple smaller cases where it makes sense to invest with smaller but sufficiently good returns. The fact that they help to correct the market and bring it back to equilibrium just means that you need to be an expert. Why make a theory that basically says – if you are not an expert, don't pay in the market and simply invest in index funds?
Just a thought: maybe investing has attracted too many non-experts that it becomes like a mass delusion that they all believe that they know how to beat a market and we need some warning for those people?
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