Re: anarcho47The Red Queen Effect is a metaphor for why what I'm saying and what you're saying isn't necessarily a contradiction. Market efficiency is an extremely paradoxical topic. Note to others: There has long been a Holy War between the investment community and the academic community on the subject. Trillions of dollars are at stake, so there had better be!QuoteThe Red Queen's race is an incident that appears in Lewis Carroll's Through the Looking-Glass and involves the Red Queen, a representation of a Queen in chess, and Alice constantly running but remaining in the same spot.  "Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else  if you run very fast for a long time, as we've been doing."  "A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"As you work, buying and selling shares, currencies or commodities , the information you have collected is being incorporated into prices.That is all kinds of data such as:- Company/Newspaper reports (hard data)- Psychology (soft data)- Tacit knowledge (other data)A very wide range indeed, it's that set of information that a human can act on, not just regular data you get in a newspaper.Now, if you and your team work very very hard and research as much and as wisely as you can, you can potentially stumble upon profit-worthy information (usually something nobody else or few know, asymmetric knowledge).However, inevitably what happens is that this is a temporary experience. This is because to make a profit you must buy/sell, and this information becomes factored into the price. Once it is factored in, there is no more profit to be made. Now the market 'knows' the data.In other words, that the market is 'efficient' in any sense, is totally dependent on anarcho47 and thousands like him doing his job properly. Just like the Red Queen, they have to keep running even faster just to stay in the same place, otherwise they will lose. The market is like a Mirror to the real world, factoring in sentient information into its Model of reality as quickly as it possibly can. It's not perfect, it frequently gets it wrong in fact. But there is nothing better than it. The computational power of collectively harnessed sentience via the price system is insane. I think once it is understood properly you either become a capitalist or a communist, it either seems magnificent or it intimidates you. No computer would be capable of such a feat, which is why utopian visions like the Venus Project are always doomed to fail if they attempt to replace it. Nobody really invented it either, which I find interesting.Anyway I would claim it is extraordinarily rare to persistently find such profit worthy information to act upon over a period in time. You see, it can't just be Dick Diamond. He could simply be having the world's biggest lucky streak. Because not even insider traders persistently manage to beat markets. It has to be Dick Diamond and the majority of people who learned his techniques over long and different time periods. That's a really big ask.Incidentally, market efficiency cannot be proven. It's even been proven market efficiency cannot be proven. That's why it's called the Efficient Market Hypothesis, not the Efficient Market Theory.In any case, I think we can certainly agree that there is no free lunch. In practice to claim speculator expertise that persistently brings in the dough will attract the headlights of the IRS very quickly. They'll assume you're the average Joe, not Dick Diamond.