Customer Quote by Warren Buffett
“Observing that the market was FREQUENTLY efficient, EMT Adherents went on to conclude incorrectly that it was ALWAYS efficient. The difference between these propositions is night and day.”
About This Quote
Source Speech: Annual Shareholder Letter, Berkshire Hathaway, 1996
People often mistake frequent market efficiency for constant efficiency, ignoring variability.
In simple terms: Frequent efficiency ≠ constant efficiency.
Recognize market conditions change.
Themes
Mood
Type
When to use this quote
- investing
- risk assessment
- portfolio management
Key Concepts
Questions to Reflect On
- How do you test for market efficiency?
- What data shows efficiency varies?
Efficiency can be overstated in volatile periods.