Season 2 of Gossip Girl is BACK. Ok. i know you think i'm probably crazy. But i seriously think that the anology of Gossip Girl to the Semi-Strong Form of Efficient Market Hyphothesis (EMH) is pretty solid.
Wonder who will read this post?!?, cuz pple i know who cares for Gossip Girls cares not for EMH, and vice versa, heehee :)
Semi-Strong Form of EMH is simply the idea that all public information is immediately known by all market participants and prices will INSTANTANEOUSLY adjust to the new info (ie that you can't make profit from publicly available information).
Isn't that just like in Gossip Girl, where information is instantly available online and everyone in their little private school would know everyone's business. Those who 'know' doesn't have an edge, but those who 'don't know', lose out. Think poor Dan Humphrey who's always the last to know as he's rarely on Gossip Girl website. Btw, Hump-phrey is a pretty good name for the character, people are always free riding off him. And i'm pretty sure Serena will be getting some other phrey hump somewhere soon.
However, Blair is different, knowing that the market is pretty efficient, she does one of two things, (i) she uses information in a superior manner, (ii) she digs deeper than the rest to get access to private (sometimes too private) information.
Hey! that's exactly what great investors do! People like Martin Whitman said that the information that he used are public information, he simply used them in a superior way. Berkshire Hathaway Assurance Corporation, which offerred to reinsure the portfolio of several existing financial guarantors is another creature which has been collecting information on the industry for over 20 years. And now when others and facing downgrade or losing access to capital market, they are one of the few which have the ability and capacity to underwrite huge volume of insurance for municipal bonds. Read this speech by Ajit Jain to understand Berkshire's rationale to enter into this market.
Be prepared, or be bitten in the ass.
"Ain't karma a bitch?..................We know Blair Waldorf is."
~Gossip Girl
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