Re: UKNM: More overvalued stocks

[Sean Phelan]

Hm.... "overvalued"... "overpriced"....


Doesn't anybody believe in the theory of efficient markets any more?


If you don't believe that markets are efficient today (ie market prices

reflect all available information, discounted for risk, liquidity, etc),

do you believe that markets have historically been efficient?


There is a vast body of research (and I mean real research by very smart

people who can not only spell econometrics, but understand what it means

and have spent entire PhDs and careers doing it) that supports the belief

that markets have been efficient from 15th century Florence to the present

day. The last two hundred year's sterling bond prices, for example,

exhibited the behaviour predicted by today's asset pricing models, long

before the models were created.


If markets were efficient in the past, before we had spreadsheets,

mechanical calculators or even the telegraph to communicate information

rapidly, can somebody PLEASE explain to me how we can POSSIBLY think that

markets are now inefficient, and are unable to accurately reflect all the

available information about a share price?


bon weekend, tout le monde...

Sean



>...and maybe the stock markets are finally getting wise to market

>capitalisations without any real revenues:

>

>http://www.wired.com/news/news/business/story/20888.html

>

>At 10:01 21/07/99 +0100, azeem azhar, lists wrote:

>>Actually, while we've all gone loopy loop about Freeserve, I'm surprised

>>no-one else is talking about the other overpriced stocks:

>>

>>The Exchange

>>

>>QXL

>>

>>Any takers for these too?

>>a

>>

>>

>>azeem azhar 			| www http://azeem.azhar.co.uk/ (*)

>>tel 07958 544 593 		| icq 315460

>>fax 0207 691 0464		| pgp http://azeem.azhar.co.uk/pgp/

>>

>>* downdated

>

>Toodle Pip

>

>Sam

>-----------------------------------------------------

> Chinwag - http://www.chinwag.com


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Sean Phelan

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