Original Photography: master_scorpian

The efficient market hypothesis is a theory that asserts financial Markets are Efficient. Over the years three forms of efficiency have been proposed. If you are classically trained in economics or finance you will have had this theory rammed down your throat. If however you are in the industry you will probably think the EMH is a pile of garbage. As this quote suggests:

"I'd be a bum on the street with a tin cup if markets were efficient"

-Warren Buffett

Weak Form Efficient Market Hypothesis

Semi Strong Form Efficient Market Hypothesis

Strong Form Efficient Market Hypothesis

Links

• EMH
• EMH Summary
• Does EMH provide evidence against trading? (PDF)
• EMH on trial.

What do you think? Is the EMH pure rubbish?

The Currency markets have reacted as expected below is the AUD/USD 1 min spot chart

The cash rate remains unchanged at 7.25% even though inflation remains high it looks like Reserve Bank is worried that another rise may slow the economy to much.

"The rise in Australia’s terms of trade currently occurring, which is larger than had been expected a couple of months ago, will work in the opposite direction. It will add substantially to national income and ability to spend, even with the slowing in global growth to below trend pace that the Bank has been assuming for some months now.

Given the opposing forces at work, considerable uncertainty remains about the outlook for demand and inflation. On balance, the Board’s current assessment is that demand growth will remain moderate this year. In the short term, inflation is likely to remain relatively high, but it should decline over time provided demand evolves as expected. Should demand not slow as expected or should expectations of high ongoing inflation begin to affect wage and price setting, that outlook would need to be reviewed.

Weighing up the available domestic and international information, the Board’s judgement is that the current stance of monetary policy remains appropriate for the time being. The Board will continue to evaluate prospects for economic activity and inflation in the light of new information."

Source: Reserve Bank Of Australia Media Release.

Original Artwork azrainman.

Oil passes the $US 120 a barrel mark.

Yahoo Still open to talks with Microsoft.

Dollar decline as growth as Bernanke signals housing growth to slow.

 

 

Original Artwork:xenolon.

It is going to be an interesting day a lot of people will be watching the Yahoo stock price today. It is only 8:30 ET and we are already seeing Yahoo down 21.8% as you can see below.

Timothy Sykes is running a competition to guess Yahoo's closing price by the end of the day I am going to take a stab at it and guess it will close at $23.52. Bloomberg has running commentary on the Yahoo shares tumble. For the latest quotes check out YHOO. Index futures are on the decline due to the Yahoo deal failure.

 

You know the old saying "Buy on the rumour sell on the news"

 Original Photography: gidibaoz

Image Credits: Polibio and Charles E. Kirk.

If you have not heard of the Kirk report you would have to be in the minority. Charles E. Kirk is the Godfather of the finance blog world. His archives date back to September 2003 and has steadily built a large subscriber base. Below are some subscriber stats obtained via Feed Analysis v1.1.

 

Kirk's website contains no advertising instead he has gone for a membership model, however he still provides free quality content. One very handy feature of the site is that when you mouse over a ticker symbol you can quickly obtain historical data from Yahoo. You can have a look at Kirk's track record here. Kirk is also very accessible and provides feedback to members questions.  This is one finance site you need to have in your bookmarks. The Kirk Report gets a perfect score.

Original Photography peteChon.

You will notice Wall Street Wit does not have a Blog Roll. This is because Blog Rolls are a big FAT waste of time and space. I would rather acknowledge worthy blogs and web sites with a review a rating and a link via a post. That way you the reader is not forced to blindly click on a link without knowing were you will end up. So without further a do here are my links and reviews for sites that rock out.

Five Star Sites 

The Kirk Report: Website, Review.

EconBrowser: Website.

Alpha Trends: Website.

Portfolio News: Website.

Bloomberg: Website.

 

Four Star Sites

Timothy Sykes: Website, Review.

Michael Covel: Website.

Ugly Chart: Website.

Neural Market Trends: Website.

Howard Lindzon: Website.

The Disciplined Investor: Website.

TraderFeed: Website.

Maoxian: Website.

Crossing Wall Street: Website.

 

Three Star Sites

Trainee Trader: Website.

Afraid to Trade: Website.

Alea: Website.

Calculated Risk: Website.

Daily Options Report: Website.

Finance Viewpoint: Website.

Naked Capitalism: Website.

The Forex Project: Website.

Abnormal Returns: Website.

Wall Street Warrior: Website.

Note: I wont link to any site that has less then three star rating.

Tim is a colourful figure in the finance blogging world. He has been trader, hedge fund manager, reality TV star, publisher, author and now an educator. Tim's most notable achievement was his trading gains made from 1999-2002, where he turned $12,415 to $1.65 million trading Penny Stocks. He is serial self promoter and has a band of haters that follow him around the web.

So is Tim a self promoting tool bag?

The short answer is NO. Tim does things his way and that is uniquely refreshing. He is not afraid to unleash his thoughts and emotions and doesn't hide behind a public relations company that carefully manages his image. He is accessible and responds to his emails promptly. Really there is not a lot of information around about trading Penny Stocks and Tim's site fills the gap. Go read his blog you will probably learn a thing or two, at the very least you will be entertained. Timothy Sykes website gets a solid fours stars the new layout and features provide a refreshing format to the usual boring finance websites.

Wall Street Wit is a one man show run by yours truly. I am a computational finance geek in search of a higher level intelligence.  Our office is located in the very up-market NULL district directly opposite NaN plaza pictured below. (Note:Not me in the picture.)

 Original Photography iBjorn 

This site will hopefully stimulate your thirst for knowledge in what is a very rewarding field. You will notice most sites that deal with computational finance topics tend to be rigorous yet boring. You will find this site is just the opposite it will be entertaining but not rigorous. Sit back relax and who know you may even learn something. One more thing we are located as far away from Wall Street as you can get. That's right we hail from the "ass end of the earth" as shown below: