Efficient Market?

Watching the market the past couple of days has reminded me of the Efficient Market Hypothesis (all available information is priced in at any point in time). As has been pointed out by many people in the past, one of the flaws of this concept is that, if all stocks really were priced perfectly, why would a person ever buy or sell a share? It is trading exactly at fair value.

Over the past five days or so, maybe the market has become truly efficient. Volume has seemed to evaporate and it has been uncanny the degree to which index prices have resisted any movement whatsoever. Or maybe it is just random.

The market here in August also reminds me of a child’s toy from when I was a kid. “Weebles.” There was catchy marketing jingle that I remember it to this day (which speaks to the power of advertising to children): “Weebles wobble but they don’t fall down.” That jingle seems to characterize the market (at least for the recent few days).

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