Started reading “Distress Investing: Principles and Technique” by Martin Whitman & Fernando Diz. I found a quote in chapter 2 that I liked and wanted to share. It concerns the idea of Efficient Market Hypothesis (EMH) and whether or not it applies to bankruptcy and distress investing.
“Characteristic 1: Market Participant
Insofar as the market participant is unsophisticated about value analysis, financed with borrowed money, and lacks inside information, that participant will face a market tending strongly to instantaneous, EMH-like efficiency. Insofar as an investor is well trained, well informed, and not influenced by day-to-day or short-run price fluctuations, that investor avoids being subject to an EMH like efficiency.”
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