Why the Stock Market Can Be Beaten 🔥

Challenging the Efficient Market Hypothesis: stock prices aren't always accurate, and savvy investors can find opportunities to beat the market.

Why the Stock Market Can Be Beaten 🔥
Why the Stock Market Can Be Beaten 🔥

About this video

One of the age-old theorems about financial markets is the Efficient Market Hypothesis. Simply put, it states that stock prices are always accurate and reflect all known information about a company. Consequently, it must be impossible to beat the market. In this video, however, we will take a walk through history, and I will discuss three unique examples that prove how financial markets can not only grossly misprice assets but also how such events have been exploited to generate enormous profits. In particular, we'll take a look at the 3Com-Palm spinoff from the dotcom bubble, the GameStop short squeeze of 2021, and option pricing in general. As you will see, financial markets even to this day are not capable of perfectly efficient pricing, thus paving the way for anyone to have the potential to beat them!


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Chapters:
0:00 Introduction
1:47 What Is The Efficient Market Hypothesis?
3:06 Example #1 (3Com-Palm Spinoff)
6:54 Example #2 (GameStop Short Squeeze)
8:54 Example #3 (Implied Volatility Overstatement)
9:52 The Key Takeaway

#stocktrading #optionstrading #stockmarketinvesting

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Video Information

Views

523

Likes

33

Duration

11:29

Published

Jun 8, 2022

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