Comments by "JP 72" (@739jep) on "Small Cap and Value Stocks" video.

@andreachello94 no that’s not quite the case. Although small caps and value stocks may have been thought at the time to have highlighted problems with EMH - all they really did was reveal the problems with the CAPM pricing model. Pricing models now include size and value factors , and while perfect market efficiency is only an ideal state that real world markets can approach- the model is currently the best we have for explaining market pricing. Even if markets are not perfectly efficient, it’s evident that they are efficient enough that investors should behave as if they were efficient. Size and value premiums do nothing in relation to leading us to reject the efficient market hypothesis. In addition , emh doesn’t imply that you will never be able to beat the market. It’s just that if you want to beat you will likely need to be exposed to extra risk.
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