On overall market irrationality, efficient market hypothesis, and fallibility of our predictions / forecasts.
"...John Maynard Keynes said, "The market can stay irrational longer than ye can stay solvent." ..."
"..First, there is the weak form of efficient-market hypothesis. What this claim is that stock-market prices cannot be predicted from analyzing past statistical patterns alone. In other words, the chartist's techniques are bound to fail.
The semi strong form of efficient-market hypothesis takes things a step further. It argues that fundamental analysis- meaning, actually looking at publicly available information on a company's financial statements, its business model, macroeconomic conditions and so forth-is also bound to fail and will also not produce returns that consistently beat the market.
"...a central premise of this book is that we must accept the fallibility of our judgment if we want to come to more accurate predictions. To the extent that markets are reflections of our collective judgment, they are fallible too. In fact, a market that makes perfect predictions is a logical impossibility...."
