, Columnist
Anomalies, Pitches and Promises
Also a Renaissance lawsuit, VIX, millicorns, unicorns and pie.
Anomalies.
The efficient-markets hypothesis -- the idea that there is no predictable way to beat the stock market -- is at the heart of modern academic finance. But the main activity of many finance academics is to find and publish "anomalies," patterns that make stock prices predictable, places where the efficient-markets hypothesis breaks down a little. It is sort of a weird activity, like a physics department whose members all go around looking for cool feathers that don't obey the law of gravity.