The business world is a buzz with reports on Jim Cramer's market manipulation admissions.
Cramer confesses that a hedge fund manager "must" use false rumors and strategically placed purchases to create the impression that a stock price is headed in the direction he wants. For example, Cramer argues that one could buy a bunch of puts on Apple stock and then call the reporters and say that someone in Apple has told you their relationship with the mobile phone carriers is breaking down.
Puts are contracts which allow you to sell your stock for a set price even if the market price plunges. The presence of a bunch of puts and negative rumors will lead many people to think that Apple stock is headed down. Cramer could then swoop in and buy it cheap.
So, a natural question for economists is - can the Efficient Market Hypothesis (EMH) hold up in the face of market manipulations like the ones Cramer describes?
Comments are welcome. My thoughts tomorrow.
Background Here
Friday, March 23, 2007
The EMH vs. Jim Cramer
Posted by Karl Smith at 12:42 PM
Subscribe to:
Post Comments (Atom)
4 comments:
I dont know why the track back didnt work
try this link:
http://www.typepad.com/t/trackback/763/17101100
Actually, if you "have" to do this to make above-market returns, it suggests the market is pretty efficient.
I think the market is pretty efficient, more on large scales and time frames, less on small scales and time frames. Cramer's games work best for short periods of time, for single stocks, especially those of small companies -- check your junk mail box for an illustration of this.
secrets book -
spam bully -
spyware cease -
spyware nuker -
spyware remover -
spy zooka -
starting a day care center -
tattoo fever -
team idemise -
the bad breath report -
the cb code -
thedietsolutionprogram -
the diet solution program -
the rich jerk -
the super mind evolution system -
turbulencetraining -
turbulence training -
vincedelmontefitness -
vince del monte fitness -
warp speed fat loss -
wedding speech 4u -
windo fix -
wrap candy -
zygor guides -
7day ebook -
360 fix kit -
advanced pc tweaker -
adware bot -
affiliate naire -
art of approaching -
beating adwords -
believe and manifest -
blogging in action -
body building revealed -
gov auction -
governmentregistry -
government registry -
gov records -
herbal hair solution -
homebre ware -
home job group -
homemadeenergy -
home made energy -
inteli gator -
joanas world -
joyful tomato -
kidney stone remedy -
learn digital photography now -
learn elements now -
linden method -
lose man boobs -
malware removal bot -
maternityacupressure -
maternity acupressure -
meet your sweet -
muscle gaining secrets -
muscle gain truth -
niche adsense themes -
ninety day powerseller -
pc optimizer pro -
pregnancy miracle -
pregnancy without pounds -
privacy control -
publicrecordspro -
public records pro -
quit smoking today -
reg genie -
registry easy -
Post a Comment