The Superinvestors of Graham-and-Doddsville
Warren Buffett · 1984
"The concentrated success of value investors from a shared intellectual 'village' refutes efficient markets."
In a famous 1984 speech, Warren Buffett debunked the Efficient Market Hypothesis (EMH). He showed that a group of successful investors who all beat the market didn't do it by pure luck; they all shared the same value investing framework taught by Benjamin Graham.
The Efficient Market Hypothesis claims that since stock prices reflect all available information, beating the market is purely a matter of statistical luck, akin to a national coin-flipping contest. Buffett argued that if all the 'lucky' coin flippers came from the same small intellectual village (Graham-and-Doddsville) and used the same specific methodology (buying businesses for less than their intrinsic value), the market could not be perfectly efficient.
How did Buffett refute the idea that successful investing is just statistical luck?
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The explanation above is written with AI assistance. These are the originals — go to them to check it.
- Columbia's retrospective on "Superinvestors"Columbia Business School
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