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How to Understand Market Pricing

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How to Understand Market Pricing

Before getting into the 10 Steps to Better Investment Experience, it is important that we understand market pricing.

How do we understand it? Think about a pencil.

In 1958, Leonard E. Reed published an essay about the combination of miracles needed to create a pencil. We can relate that to the work by Eugene Fama, the Efficient Market Hypothesis. Fama wrote that professional investors had a poor track record trying to beat the market by stock picking.  Markets price all the available information efficiently driving the prices of stocks to a fair market value.

Why a pencil? This podcast teaches you the correlation of a pencil with the stock market, and how it helps us understand market pricing better.

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