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Market efficiency does not eliminate the need for critical thinking from "summary" of The Most Important Thing by Howard Marks
Market efficiency suggests that asset prices reflect all available information. If this is true, it implies that consistently beating the market is nearly impossible, as any new information is rapidly absorbed into prices. However, this does not mean that investors can abandon their analytical faculties. The reality is that market efficiency varies across different assets and time periods. Understanding this variability requires a discerning eye. Not all information is equal; some data is more significant or timely than others. An efficient market does not guarantee that all investors interpret information correctly. It merely indic...
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