Weak-form EMH is obviously wrong. The key missing...

Weak-form EMH is obviously wrong.

The key missing insight is that publicly *available* information is not actually *read* by the majority of people involved in the market.

If you weaken it even MORE, to refer only to "widely known" information, then you get something closer to true.

But you still have to weaken it even MORE, to state that the arbitrage opportunities for riskless gain "do not persist" rather than that they "do not exist". Because we all know that arbitrage opportunities for nearly-riskless gain frequently happen, although they aren't large. (Play around trading Shell A stock and Shell B stock, both with liquid markets, for a while if you don't believe me.)

And once you've done that, you've reduced the hypothesis to the following statement:
Given widely known information which leads to an opportunity to make arbitrage profits, people will relatively quickly within a year or two) take the opportunity to take those arbitrage profits, thus eliminating them.

This is a trivial statement with no interesting economic implications.



A