There is a theory, in the finance, known as "efficient market theory". The idea is that all the knowledge about market prices is already factored into the price, as the variety of people with money in the market between them would have fed in every piece of information. If an event happens then people will all react to the new information, so will under react and some will overreact but on average the market will be right. The efficient market theory states that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck. So, if this is true, the only way to beat the market consistently is through luck alone, which will eventually run out. I'm mentioning this because I recently had a conversation with a friend who is involved in the financial markets and we were talking about the parallels between the bet exchange markets and the financial market and he mentioned efficient market theory. Anyone have any thoughts?
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