Investor Glossary-market inefficiencyInvestor Glossary-market inefficiencyInvestor Glossary-market inefficiencyInvestor Glossary-market inefficiencyInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Market Inefficiency

The HTML to link to this page
 

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...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: ex-dividend, debt service coverage, required rate of return, annual return, FTSE, margin rate, 1035 exchange, Key Rate Duration, FICO score, inflation, quality assurance, option premium, 1031 exchange, current ratio, minority interest, wholly-owned subsidiary, average price per share, phantom income, VIX, EBITDA, in escrow, risk management, diluted share, deferred tax, ex-dividend date, reverse mortgage, deferred revenue, cancelled check, real GDP, per diem, command economy, stock split, stock market close, Zero Cost Collar, dividends payable, class C shares, retained earnings, balance sheet, labor relations, liquidity ratio, APR, 144a, open position, covered put, implied volatility, limit order, 401a, LIBOR, irrevocable trust


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use