James Harris Simons, founder of Renaissance Technologies, agrees with Value investors on the Efficient Market Hypothesis (EMH).
Trends
Followers of Benjamin Graham — Warren Buffett's mentor — don't usually care much for trends. But Simons contends that there exist trends that are too subtle for the average investor to even identify.
This is in agreement with what Graham himself wrote:
"To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street."
"any approach to moneymaking in the stock market which can be easily described and followed by a lot of people is by its terms too simple and too easy to last."
EMH
Simons emphasizes that the central tenet of the Efficient Market Hypothesis (EMH) that "the price is always right" is "just not true".
Simons' views on the Efficient Market Hypothesis (EMH) are therefore no different from those of famous Value Investors such as Warren Buffett and Seth Klarman.
Watch Videos
Simons: EMH
Simons - Full Interview
Simons contends that there exist trends that are too subtle for the average investor to identify without sophisticated models and equipment.
Daniel Kahneman
A Nobel Laureate in Economic Sciences, Daniel Kahneman too explains how formulas (or models) beat individual judgment in situations with weak cues and marginal long-term predictability.
Submitted by GrahamValue. Created on Friday 15th June 2018. Updated on Monday 2nd January 2023.