Are the Efficient Market Hypothesis and the Concept of Fundamental Value Dead?
The post-modern age in finance has arrived, and nihilism in its various forms has become the ideological order of the day. It’s interesting to note that today, as in most similar cyclical ideological epochs, populist anti-intellectualism is playing an integral role in popularizing anti-establishment narratives. In reflecting upon today’s financial zeitgeist, it’s interesting to analyze two widespread fads that are currently popular among media commentators. First, it’s become fashionable among commentators to defenestrate formerly prestigious theories such as the Efficient Markets Hypothesis (EMH) and their academic purveyors. Second, it’s today considered almost de rigueur for financial-markets commentators to pooh-pooh the relevance of fundamental valuation in stock-market investing. Some commentaries, such as the recent well-written piece by Mr. David Waggoner entitled, Efficient Market Hypothesis’ False Reign Over Financial Markets, have gone even further and suggested that the sup
