Money Brain: Here’s some good news for value investors

An “efficient” stock market is a fair game in the sense that no investor can beat the market because they know something other investors don’t know. The so-called efficient market hypothesis, for instance, essentially states that what anyone knows isn’t worth knowing. The presumption is that stock prices take into account all information so that no investor can take advantage of other people’s ignorance.

Some investors do compile outstanding records. However, consider this coin-calling experiment: Suppose there are 32 players and half predict “heads” for the first flip while half predict tails. The coin is flipped and lands heads, making the first half right.

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