Efficient Market/Random Walk Joke

July 9, 2007 9:58am by

Here’s my variation on the classic EMH joke:

Two Economics professors are walking back to their offices after giving a lecture on the Random Walk of stock prices.

"Look!" says one of the academics, "There’s $1.7 billion dollars!"

"Nonsense!" says the other. "The market efficiency hypothesis states that security prices fully reflect all available information. That money is impossible."

"Schmucks!" laughs Jim Simmons of Renaissance Technologies. He picks up the money and goes back to his office.


You may now return to your previously scheduled belief system.

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  1. David Merkel commented on Jul 9

    Thanks for the link, Barry. Mr. Simons should make the EMH academics distinctly uncomfortable… a very bright guy who has hired some of the best talent out there.

  2. TDL commented on Jul 9

    This link is going straight to one of my banking buddies!

    TDL

  3. The Financial Philosopher commented on Jul 10

    For each of the few traders or other “professional” money managers that exist who can overcome the efficiencies of the market, there will at least 1,000 who will make the attempt to do just the same. After all, it is in our human nature to do so. That’s why Golf is so popular…

  4. halbhh commented on Jul 10

    heh heh….I guess the “random walk” part was the professors walking by the money, lol

  5. Ryan commented on Jul 10

    Random Walk/EMH is academic BS. 99% of professors seem to believe and 99% of people who work in the real markets do not.

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