Chapter 20 17 about darts

There is no herd mentality in our economic theory, (it often appears as blind conformity,) So we got the envy of many people. — Bennard.Baroch Ben.Graham once compared the behavior of stocks to that of a friendly but volatile man named "Mr. Market" Behavior, happy for a while, lost for a while. Market's next reaction could be one of anyone's predictions.The investor's strategy is to ignore his unpredictable mood swings.But on October 19, 1987, everyone fell under his curse and had to sell painfully—all stocks. Buffett expected Graham to be abandoned.He is believed to be a "witch doctor" scholar with "mysterious ways and techniques".Although Ben's theory is to deal with "Supermarket Contagion"

The always right way, but few business schools will use Graham's theory as a teaching material.Buffett lamented after the tragedy: "The pundits and scholars only talk about efficient markets, dynamic protection, and second-best situations." The debacle exposed gaps in Wall Street's intellectual fabric, but the debate has been going on for decades.Since the 1960s, under the leadership of Buffett, investors such as Graham and Dodd have launched a fierce debate with modern financial theorists.Oddly enough, this contemporary (maybe always will be) The most successful investors are ignored by most scholars in the field.Those apologists thought he was a heretic, and Buffett believed that these monks were increasingly trying to use beautiful language to prove in detail that the earth is indeed flat.

Buffett's career premise is that sound analysis (though difficult and subjective) can aid in stock selection.Often the price of some stock will be lower than its actual value, and the shrewd investor can buy it to make a profit. Scholars have come up with a simple but fascinating theory, the efficient market principle.It believes that at any time, all publicly available information about a company can be reflected in its stock price. When a movement in a certain stock becomes public, traders jump into action, buying or selling until its price rebalances.Its premise is that the original price of the stock is already very reasonable, therefore, the future price changes are also very reasonable.The role of the trader is simply to push Adam.Smith's theory of the invisible hand.

Now that the stock price already reflects the necessary information about the company, the risk analysis is really just a reference to some well-known information, "essentially worthless and incomplete." The direction of the stock still depends on (unknown) new information.It's still unpredictable and random. If the market is random, then investing is a game of chance.Buffett is just a lucky person, not to mention sophisticated.Just like a person who always gets heads when tossing a coin, he can only be considered lucky, not a master coin tosser.This claim directly calls into question Buffett's intrinsic ability.

Buffett's record is another challenge, built without following any rules.His career success is a mockery of scholars, as if to ask: "You are so smart, why do you tell me why I am so rich?" But all business schools and economics departments regard efficient market theory as a classic.It was held to be absolutely true without a doubt, and different theories were everywhere banned.As an investment theory and basis, this theory has also penetrated into Wall Street.In fact, it is favored by the vast majority of investors, has become the theoretical basis for analyzing uncertainty, and has been gradually developed and applied in various fields.An early contributor to it was Paul, an economist and textbook author at the Massachusetts Institute of Technology. A. Samuelson.He is a supporter of Keynesianism.

But Earl Keynes satirized the stock market as a casino, while Samuelson was keen on market prices.in 1950 Around that time, he bought a coupon bond with an asking price of $125.Before long he asserted that if the distribution company had really been operating "in the open," it would have asked for more than $125 and would not have sent the coupons to anyone else.There's a joke about efficient market theorists about two economists walking around campus and seeing a ten-dollar bill on the ground, one of them bends down to pick it up, and the other says, "Don't bother. If it was really worth ten dollars, it wouldn’t be there.” Samuelson’s landmark 1965 book, On the Randomness of Accurately Predicting Prices, put an academic veil on this view. coat.His appealing point is that future events "always have shadows"—that is, they are reflected in prices.

When you confirm that the price is going to go up, it's already gone up...you can't get something for nothing. Two years later, Samuelson took the podium to a Senate committee to discuss his vision for the trust.We have said that the speculative era trust funds commanded high prices, but their managers did not deserve them, and the typical fund did not even meet the market average.Samuelson's explanation is that "smart people are always looking for something of value," buying a bargain, selling a good price, and even grabbing an opportunity before it even fully presents itself.The trust's record is so poor they should be throwing darts as well.Jonny, chairman of the committee.Sparkman was stunned. Did Samuelson mean darts?

Samuelson: My report just said that intermediate funds that have access to this kind of high-yield business can actually earn at best comparable to the random selection of stocks in the market. Sparkman: By random selection, do you mean the kind where you close your eyes and grab at random? Samuelson: Exactly. Sparkman: Or the ones picked by experts like you? Samuelson: No.random.By random I mean something like rolling a dice, or darts, or whatever random numbers. But the professor is not encouraging throwing darts to choose investments.He knew that there was something wrong with the efficient market principle.The stock price changes faster than the liquidity of the company that issued it, and in theory the stock price is a mirror of liquidity.Samuelson was with Conrad at the time.Tarver debate.The latter, a student of Graham and an early supporter of Buffett, dismissed the theory as nonsense.For a while Buffett actually hung a dart board in his office, and he "throws darts" every year.Tarver told him that Samuelson was puzzled and growing interested in him.He was the first efficient-market theorist to fixate on Buffett as much as an astronomer is to a mysterious star.

But Samuelson didn't change his mind.Another attractive feature of his theory is to put Adam.Smith's classical economic theory was extended to the financial market.Investors like Buffett see intrinsic value as an inherent quality that lies "behind or below" the perceived market price, which itself is only an approximation.But classical scholars believe that the invisible hand has been bringing price and value into line. Taken to an extreme point of view, value only exists—or exists in a sense—when buyers and sellers agree on a price.If IBM sells for $120 a share, then IBM is worth $120—nothing more and no less.Of course, the implicit premise is that both buyers and sellers are wise.

Buffett's views on companies and individuals are more cautious and thoughtful.First, the value is not so precise; another sane investor might pay $130 for IBM stock.And investors haven't always been sane.Sometimes, especially when it comes to herd mentality, they might offer $160, or sell it for as little as $80. Efficient market theory actually tries to expose the irrational side of the market.Wall Street has trumpeted the role of so-called technical analysts since the days of Graham.These can be Merrill Lynch's human resources Predict future trends by analyzing past price lists.Their terms are widely accepted, and critics will say, "The stock has encountered a serious obstacle." But that is not an obstacle, just a line of reasoning on the table.Efficient market theorists call people who decide based on charts liars; or, use the University of Chicago economist Eugene. In F. Fermat's words, an "astrologer".Prices are only "formed" in retrospect, and no one can say whether a stock will bounce back 10% after falling 10% or fall another 10%. (For reasons known only to them, Merrill Lynch, Morgan Stanley, Salomon Brothers, and a few others still employ such self-comforters.)

But the theorists simply substitute their own voodoo for that of the chartists.They scoff at the notion that prices reflect the future while advocating that prices are the correct response to the present.That said, the price can never be wrong.They put all the information together in the best way imaginable to speculate on the company's long-term prospects.It is therefore pointless to study these prospects.In addition to attacking chartists, they also took aim at "essential analysts" like Buffett, who combed through company reports to find valuable votes."If stochastic theory is correct and mortgage transactions are 'efficient,' then stock prices represent the correct intrinsic value at all times," Fermat said. Redundant essential analysis is therefore of value only when the analyst has no information—or has new insights into the role of ordinary information..." Literally, there is a big hole in this.Obviously, analysts cannot function without new information or insights.But the term "new information" cannot be taken literally.It implies that investors who have been very successful in business must have inside information, at least information that few people know.This completes the meaning of the sentence: Even an ideal market will have a lag time before the information is fully disclosed.The Economist, which specializes in distorting reports of prominent theorists, asserts that stock-picking geniuses are "either little or nonexistent," and quips: A genius who knows himself." Samuelson's words are clearer: Again, experience tells us, like Warren.People like Buffett have the ability to make a lot of money because they know what is essential and what new information is worth spending a lot of money on.Such superstars cost a fortune: when you pay attention to them, their fees are astronomical. Although Samuelson knew that Buffett didn't pay for information, in any case he got his intelligence primarily from annual reports, which anyone can do.But Samuelson insisted on attributing Buffett's success to his intelligence gathering, not discussing whether Buffett had a genius for analyzing data, as if he was just a good librarian. But the Nobel laureate in economics knows there's more to Buffett.He bought a lot of Berkshire shortly after he spoke on the Senate floor.Hathaway stock, as a hedge in this case, (as in the past Voltaire temporarily embraced Christianity, ultimately to destroy it.) Samuelson declined to comment on this, but he is not alone One.The economist Azhi A. Alzie of the University of California, Los Angeles we mentioned also bought Berkshire shares, but he still insisted in a letter to a classmate: I still firmly believe that no investment fund, in any new way or in a new field, can justify a super genius decision.It was luck, yes, not genius.Reliable predictions in this world cost considerable money to make, but leave nothing but surprises for others.This kind of surprise is what defines "random." But Alzie was keen to explain Buffett's success.Finally, he argues that there is a bias in Nebraska's insurance laws that allows the state's insurance companies to have more power than companies in other states to oversee investments. I think his success depends entirely on this vantage point, not on his superiority over his competitors. We couldn't help but be surprised that Alzie didn't come across as cheap.At least Samuelson said, "Warren is probably the kind of investment genius I see." Which is actually a curse.Genius is not skill - Samuelson denied his skill. "Warren once said in a speech: 'Any fool can see that the price of The Washington Post is too low,'" Samuelson said. "I'm not a fool, so I can't see it." " So why did Buffett buy The Post? "That's the difference between genius and skill," Samuelson replied.Buffett is considered a geek.Efficient market theory is still always true.Hence William of Stanford. F. Sharp believes that Buffett is just a "3Σ event-a statistically extremely small probability that can be ignored." Based on the efficient market theory, scholars have painstakingly established a complex set of modern financial theories.Finance is the opposite of investment, and it explains the role of financing from the perspective of the company.It's useful theory, but not exact.It is now a computable social science, along with investment theory, and much more precise than the real world.A scholar gave a formula, where R is the stock return, M refers to the market, a and b are parameters, which vary with different stocks, and u is a random factor: R=a+bM+u. The scholar hastened to add that this is just a The "simplest case" model, no model will always be correct like Dead Sea Floating. This "scientific" basis is only the relevant basis that scholars believe to be correct: (assuming ideal conditions) the stock price ignores all major change factors-such as the company's strategy, products, market capabilities and operating methods, etc. It is very important in the evaluation.But they are subjective and imprecise.And investment analysts like Buffett no doubt consider these factors every day. One might think that perhaps some business schools would use Buffett's report, at least as an introduction when discussing these issues.But Buffett is not a member of the academic world except for temporary invitations to give speeches.He is very sensitive about it.Many investors are satisfied as long as they make money, while Buffett is very eager to be recognized by society.It's important to him.He was a teacher and now hopes that Graham and himself, Buffett, will be a useful role model.In a letter he said: I think the fact that Graham-Newman, Buffett & Partners, and Berkshire have ruled the roost for 63 years is a pretty good demonstration of the stupidity of efficient markets theory...these three organizations operate in hundreds of securities So much... We don't have to dig any inside information... We're just operating on fully public information... The most painful betrayal for Buffett was that Graham was very skeptical of the need for analysis at the end of his life, because the research on stocks was sufficient at that time.He told an interviewer shortly before his death in 1976: I am no longer advocating technically complex risk analysis to find valuable opportunities.It was valuable 40 years ago, when we had just published Graham and Dodd.Things are different now... Since Graham also lashed out at so-called "randomness", especially the notion of efficient prices 6 months ago, one can only assume that his ideas are still theoretically invalid.But he doubts that people can No use it.Buffett never accused Graham of being unfaithful, and he always tried to see the best of him. Graham's ability to talk on paper is indeed better than investment. In contrast to him, neither Buffett nor academics like ambiguous theories.Economists consider the theory "sacrosanct," Buffett said.Currently widely used textbook - Richard.Brali and Stuart.No one doubts the correctness of "Principles of Enterprise Finance" edited by Mai Ya. The author says he "discovered" the efficient market principle in the same way that Marie Curie discovered the naturally occurring radium. They go around preaching: "In an efficient market price is completely reassuring. It provides all useful information about every security." One can imagine what a ruthless trader would think of an ideal stock market under this description.The traders described by Bradley and Maier have been calm, and so have the speculators: In efficient markets, there are no financial errors of judgment.Investors watch the company's money flow listlessly, to see how much goes to their own names. Scholars have indeed tested this theory time and again.On a somewhat narrow scale, they have studied many special cases of random prices, which are so-called anomalous special cases that actually obey the laws of nature.For example, certain stocks are profitable in January, or which day of the week is profitable, or certain small companies are profitable, etc. These special cases of the theory have made scholars ecstatic, and they are eager to find more similar examples. What a strange way to study.But there is no study of "abnormal" situations in this favored theoretical system, because that would make it appear contradictory.It does not mention the undefeated Buffett record, and Keynes, Graham, John.Templeton, Mario.Gabelli, John.Neff and Peter.Lynch, those are just some of the more famous names. They turn a blind eye to these records or wish they did not exist.Tony, investment manager at Bankers Trust.Thomson casually said Buffett was an "exception."His record says nothing; he doesn't look at Buffett's four-season record and asserts that no one could have achieved such success by virtue of wit or luck. "Therefore, it is up to Mr. Buffett to answer that question himself." Barton, an economist at Princeton University. G. McKea vigorously advocated this point of view in his best-selling book "A Walk Through Wall Street": "Although I believe that there is such a possibility of excellent investment managers, I must emphasize that the materials we have so far cannot prove Such capable men do exist..." Macchia sees no more of this "talent" than a coin tosser who attributes his luck to skill. "God Almighty," he asserted, " No one knows what the correct spread for the stock is going to be." This touching comment is really just a straw man.The people of Graham and Dodd never asserted the correct price of a certain stock.Their point of view is a kind of nebulous range.All they say is that there are times when prices are so out of whack that people buy in huge quantities without thinking.There are not many such examples, and Graham and Dodd bought a dozen of these stocks out of thousands.But these few kinds of stocks can make people a fortune.Buffett has this to say: (Proponents of efficient market theory) see that the market is often efficient and assert that it is always efficient.This is actually a world of difference. A serious disagreement between the two opposing defenses is over the definition of "risk."In Buffett's view, risk refers to the risk of more than the actual value of a business, and the range of various variable factors is unlimited.Is a company dependent on only a few customers?Does the chairman drink?Unable to know exactly the extent and type of such risks, Buffett sought out only a few companies that could afford to be wrong. Theorists dismiss such minutiae; they believe that risk is measurable.due to shares Normally, they assume that the business's predictable risks are reflected in its share price.All changes in the business will cause corresponding changes in the stock price.Therefore, when judging the risk of an investment, it is best to look at the past risk profile of the stock.So the risk of a stock is the volatility of its price.It has a precise numerical definition, which is the corresponding relationship between its volatility and market volatility.As if to sanctify its algebraic form, it uses a Greek code, β.If a stock has a beta of 1.0, it is as volatile as the market; if it is 1.2, it is more volatile than the market; if it is 1.5, it is more volatile. The logic of the theorist develops in a confusing spiral.Investors don't like risk.They bought stocks with a high beta value rationally, and it must be because the rate of return of this stock is higher than the average level, that is, the rate of return can offset the value of beta risk in mathematical reasoning.Conversely, investors who bought stocks with a low beta value can only obtain lower returns, which is also the price paid for the past stability of the stock.The reality is that no one provides you with a free lunch. If you want to make more money, you have to accept the additional risk, that is, a high β value.Now it is necessary to mention the nature of the modern financial field.The only factor necessary to calculate a stock's return is its beta.All the fundamentals of the company are irrelevant; the beta, calculated from the stock's past prices, is the only thing that matters. "What's your beta?" the academics ask, as if singing an old song.Analysts on Wall Street are also very concerned.Brokers across the country actually ask their analysts to assess the beta of their stocks and formulate returns accordingly. To Graham and Buffett, this seemed like madness.For a long-term investor, stock volatility does not increase risk.In fact, risk exists before β is formulated. Let us look at the example of Buffett buying the "Washington Post". At that time, the market valuation of "The Post" was 80 million US dollars. The bigger it is, the more risky it is according to efficient market theory.Buffett said sharply: "I will never understand why spending 40 million is more risky than spending 80 million." Columbia University brought both sides of the debate together in 1984, the 15th anniversary of Graham and Dodd's textbook.Buffett was invited to speak on behalf of Graham and Dodd's side, Mike from Rogers World University. C. Johnson represents the academic side.Johnson was a devout believer, writing in 1978: I believe there is no theory in economics that has more empirical evidence than the efficient market theory. In fact he warns dissenters that "the theory is so widely accepted as a fact of life that it would be difficult for any scholar to come up with a model contrary to it." Thanks to Johnson's teachings, no one dared to object to this theory, especially the β concept.Now Columbia University's Ulis Hall is packed with investors like Buffett.Facing the large audience, Jiang Sen changed his serious tone.He felt like "a turkey before the turkey hunt." But this turkey is no easy feat.Johnson began by putting forward an abstract point: the analysis of public information cannot lead to corresponding profits.Then he gave some examples, all of which are special cases.However, he seems to admit the possibility of good analysts, but still ridicules such professionals on the whole.People consult stock analysts, just like consulting priests, "out of psychological needs." People are dissatisfied because scientific explanations have no known answers or (worse) no answers at all—in which case they're more than willing to invent some answers or pay someone to make them up for them. Stock analysts, then, became the aftermath of "counterfeit drug sellers, psychics, astrologers, and priests." A new generation of mental liars.Against these heretical stock players, Johnson demanded recognition of the "scientificity" of efficient market theory.The meeting was attended by "the star students of Graham and Dodd," and Johnson also asserted that it was difficult to say whether "they" were really outstanding, citing the famous "problem of selection propensity." If I investigate how some less brilliant analysts use coin tosses to make decisions, I would venture to say that some have landed heads twice, or even 10 times in a round. Buffett couldn't have asked for a better explanation.The example that most money dealers can't do better than coin tossers has been used over and over.But besides this, can't people see anything else?Since most exchanges are made by outstanding people, the average stock picker can only hold a candle to them.The question is whether there are enough loopholes in the efficient market to allow some unidentified groups (organizations) to profit from it? Borrowing Johnson's example, Buffett talked about a "National Coin Toss Competition": Everyone in the country tosses a coin every day, and the person whose tail is up is eliminated. After 20 days, there will only be 215 coin tossers in the country. Now these people are likely to be a little cocky - and that's human.Maybe they try to be modest, but at cocktail parties they often admit to the pretty opposite sex what their skills are, what are their opinions on the field of coin tossing... so some business school professors will rudely point out that if let 225 million gibbons toss a coin and the result is the same... But what would people think if most of the last gibbons came from the same zoo—or, more specifically, Omaha?They will suspect that the zookeeper has something to do with it.Buffett's point is that these veterans who can throw heads do come from the same zoo-"Graham and Dodd's think tank village".He then flagged the records of 39 Graham and Dodd financial managers—all of whom Buffett had longstanding personal ties to.They come in flavors ranging from cigars (Walter Schloss) to franchise stocks (Bill Ryan).But they have all been invincible in the market for a long time.And each has the characteristic of Graham and Dodd, looking for stocks whose market price doesn't match their value.They never cared whether the stock price was high on Monday or Tuesday, whether it was high in January or high in August. Buffett found that academics are also studying these issues.But they only work on measurable problems rather than meaningful ones. "A friend of ours (Charlie Munger) said that the boss with the hammer looks like a nail in everything." Buffett seems to particularly dislike the views of his alma mater.He is willing to come to Columbia University to give a lecture every two years, but he is unwilling to donate money.Business School Dean John. C. Barton said: "He told me very frankly that he believes that education is not improved by money, and that what he teaches in business schools is against him. He is very hostile to the study of efficient market theory." Barton -- who also owns some Berkshire shares -- thinks Buffett's reasoning is sound but strangely short-sighted.Buffett often personally lent money to Graham, but when Barton asked him to donate some money to the school to train future Grahams and Buffetts, he always refused. Columbia's professors are not as one-sided as most universities.It often hires Wall Street luminaries to give lectures, some of whom teach the Graham and Dodd methods, but the finance courses are still about effective theory.If you go to the business book column of the school bookstore and look around, you can find that students don't need to know the names of Graham and Dodd, and they can still get a master's degree in business if they don't know anything about value investing.The university ended up creating a Graham and Dodd position, oddly giving it to Bruce.Greenwald; he studied market investment theory, the man who married money.After he made one or two million in futures, he lost in oil and divorced his wife. "I'm a complete idiot when it comes to investing," he said kindly. He added that he made the investment out of speculation.He invited Buffett to give a guest lecture, and at the same time thought that he should not be imitated. "I have sympathy for Graham and Dodd's views," he said, "but I'm not one of them." Wall Street at the time was awash with such theories.People gravitate toward "precise" stock analysis.Brokers focus on picking stocks in groups rather than specific good stocks.Circa 1979, Jack Se.Benman's decision maker famously said that he didn't want analysts to analyze stocks independently like autonomous entrepreneurs, that is, unlike Buffett. The emergence of stock futures in the 1980s marked the arrival of this theoretical era.Scholars have said that investors cannot choose stocks.Now they don't have to try, they just throw darts across the market. In 1982, Buffett invited John, chairman of the Oversight and Investigation Committee under the House of Representatives.Dinger prohibited the issuance of these futures. "We don't need more people betting on the direction of the stock market with this meaningless tool," Buffett wrote.He predicted and warned that these futures would cause a lot of speculation to the detriment of the interests of the majority shareholders. It is easy for people to confuse futures with stocks. Aren't they both investments?This is a question worth discussing.Futures is a priceless prediction of the market trend. It is not to accumulate funds for enterprises, but the fundamental purpose of the stock market is to attract funds.Futures do not bet on business operations, but bet on the future. In the 1980s, a large amount of funds poured into the futures industry and some "directional funds" that simulated the average level of the market (by buying various stocks or a certain reasonable proportion of stocks.) Brokers gave up investment; The role in the market is to rationalize prices by finding bargains and selling high-priced stocks.By 1986, a total of more than 100 billion U.S. dollars was operated in this way "passively", that is, it was not operated at all.This will inevitably lead to the bankruptcy of the stock. By the summer of 1986, it was finally clamoring that the trend had gone too far.Said at the time.Jones dropped an astounding 62 points.Maybe too many people care about the death list of stocks!Barton.Writing in the Wall Street Journal, MacKea disputes that automatic investing can only lead to celebrations if markets are efficient: …I am proud, at least in part because of me, that more and more people are beginning to believe in the effectiveness of the stock market and are moving toward hands-off stock management. Buffett pointed out in the "Washington Post" that this new era of trading activities is turning the pessimistic prediction that "the Keynesian market is a casino" into reality.Speculation is everywhere in the market, and overactive trading is destroying the function of discovering the value of commodities that futures trading should have.This new arcane method is not an investment; it does no good to society; and it does not work by the "invisible hand" but by the "feet that trips society."This time Buffett's sarcasm was harsh: I always wondered what if a boat with 25 brokers had an accident and they struggled to swim to a deserted island with no hope of rescue.In order to live as well as possible, they began to develop the economy.I wonder if they would send 20 people out to produce food, clothes, housing, etc., while the other 5 sit there endlessly trading what those 20 haven't yet produced? As a solution to "casino society," Buffett proposed a Jonathan.Swift would consider the "moderate tax" approach: a 100 percent tax on profits on stocks and futures held for less than a year.Of course no one would take the idea for granted, but concerns about overly active trading persist. The markets in 1987 were turbulent, with growing fears of a crash.McGee again in "New York The New York Times published an article saying that the push button trading method can improve "liquidity".When hinting at the market, he said: "But due to marginal influences, the market seems to be a little bit prone to change." The words did not fall, and the market collapsed three weeks later.Brady's report on Black Monday shows that McGee missed a common truth: when everyone is on the side of the transaction, the liquidity of futures is only an illusion. McGee once praised professional investors for using futures "to transfer and control risks and respond to market changes."Buffett believes that the real risks—such as the risk of plummeting sales of furniture and world encyclopedias—are not transferable.This risk is inherent in Berkshire.There is no need for a "reaction" to market changes.He blamed the market crash on those whom McKea praised: We should thank professional investors managing billions of dollars for creating this storm.Many prestigious money bosses are not focused on future business development, but on what other money bosses will do. The market has weathered the storm, but the theory has a hole.How can the price be reasonable before and after the storm?No one has a new explanation for this.There are never sudden changes in future profit projections.In fact, the person who sold the stock on October 19 had no long-term total profit in mind.Yale University economist Robert.Schiller polled 1,000 people shortly after Black Monday, suggesting that the only news investors had on that day was the crash.The calm, "settled" "Brieley and Miles" investors that Schiller describes were also sweating that day, with a tachycardia and high nervousness.They checked stock prices an average of 35 times. The survey also indicated a small degree of public psychology, with 40% of institutional investors admitting to "contagious fear from others". One more hit, Eugene.Fermat proved that the beta value of a stock has nothing to do with the expected return. The β argument won a Nobel Prize, and now it is proven that β is useless.But analysts and academics take advantage of it anyway.Its definition keeps changing, but the whole theoretical system remains the same. The Economist reported that the theory had a life of its own, despite the fact that it was "so bad." Charles of the London School of Economics.Goodhard points out that no one has come up with a better theory.学者们只是试图用一种不这么吓人的方法来解释不妙的现实。 《布里厄利和迈尔斯》杂志在“崩溃”以后的版面也没有改革。它在一小段文字中承认黑色星期一反映出一些难题。但在同一页，作者再次建议：“……你可以信任价格。”到底是哪个价格——10月19日早上的价格？还是6小时后的价格？不过不要紧，该理论“已被事实反复证明是对的”。 从广义上看，这理论仍把持着投资领域。华尔街的股东们仍纷纷运用神秘的新工具，咨询者也还是建议最大的“多样化”。特别是伯克希尔的股东，老有人建议他们“多样化”——即卖了伯克希尔。JP摩根托管着某位妇女的投资，她把所有的钱都放在伯克希尔上了。当她的股票升到几百万美元时，她在摩根公司工作的丈夫反复劝说她卖出，可惜没用。他不相信某种投资是最好的，因此在她的话后面附了张条子来掩饰自己：“共同的托管人和受益人拒绝卖出伯克希尔。哈撒韦的股票。……” 从狭义上看，该理论继续存在对巴菲特大有好处。他的数千个竞争对手被教导说研究股票是浪费时间。“从自私的角度讲，”巴菲特在风波之后写道，“格雷厄姆派也许应捐点钱保证一直有人在传授有效市场理论。”可是如果大学教巴菲特理论他会更高兴。在学术界，他仍是“异端”、“旁门左 道“和无关的”3Σ“。”没有人，“他描写理论支持者道，”说过自己错了，不管他错误地教出了几千名学生。更有甚者，市场有效理论仍是商学院的主要教程之一。“而巴菲特的理论则不是。但在黑色星期一之后，巴菲特更要提出自己最有力的理论了。