Market Efficiency David Booth The Financial Times featured David Booth, Dimensional’s chairman and co-CEO, in a article titled “Still a Firm Believer in Market Efficiency.” The article recognises how the validity of the firm’s founding beliefs has contributed to its steady growth and notable outperformance in small cap and emerging markets portfolios. Click for full article  Market Efficiency David Booth

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Question Is the market turmoil a sign that markets are not efficient? Answer The market turmoil is caused by some combination of (i) quickly fluctuating changes in expected cashflows (future profitability), and (ii) variation in investor risk aversion that leads to variation in expected returns (the discount rates for expected cashflows). Both responses can be rational. In short, a change…

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