There are a lot of stupid people who don't understand what an "efficient market" means. Efficiency here does mean someone beating an an external entity. The people ARE the market. An efficient market means that at any given point in time there is someone exploiting another person. Every sell is balanced by a buy so that means someone is gaining money or losing money. If there was no belief in making money there would be no market. It is the combined smart and dumb actions of millions of people that creates the efficiency.
>>1059424 >if the markets are truly efficient Meaningless assumption.
Let's do some math. The average performance of all companies is the "market". Therefore, half will perform above average and half will perform below average. Therefore, you assuming that you are either performing better or worse than the market, you will have about a 50% chance at each.
Pro tip: the S&P 500 is not "the market", for it is the top 500 companies.
>>1059424 >In financial economics, the efficient-market hypothesis (EMH) states that asset prices fully reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information or changes in discount rates (the latter may be predictable or unpredictable).
Well, if you accept the EMH, I'd imagine there would be two ways
1) They aren't CONSISTENTLY outperforming the market
2) They have access to information the market doesn't
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