   
|
|
|
|
Market Inefficiency
|
Market inefficiency is a condition that occurs when current prices don't reflect the available information regarding securities. The anomaly known as market inefficiency can occur if an individual does not properly analyze the existing public information, or if an individual somehow obtains certain information before others do. For example, if an investor mistakenly prices the value of a distressed company's future earnings too low, market inefficiency may occur; put differently, investors may interpret that company's stocks to be worse investments than they actually are, resulting in market inefficiency. Many investors attempt to use a market inefficiency to their advantage. Famed investor Warren Buffet claims to have accumulated his fortune as a result of market inefficiency. In regards to market inefficiency, Warren Buffet has stated, "I'd be a bum on the street with a tin cup if the markets were efficient."
Rate this market inefficiency definition...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: EBITDA, liquidity ratio, 401a, deferred tax, command economy, 144a, per diem, margin rate, deferred revenue, required rate of return, cancelled check, open position, stock split, ex-dividend, implied volatility, in escrow, irrevocable trust, limit order, quality assurance, risk management, 1035 exchange, Key Rate Duration, class C shares, current ratio, Zero Cost Collar, 1031 exchange, wholly-owned subsidiary, VIX, reverse mortgage, retained earnings, phantom income, option premium, minority interest, labor relations, ex-dividend date, covered put, real GDP, LIBOR, inflation, dividends payable, diluted share, debt service coverage, balance sheet, APR, equities, average price per share, FICO score, FTSE, stock market close
|
|
|
|
