“If the efficient market hypothesis is true – and the Challenger explosion example certainly implies it is – The wisdom of crowds has enormously far reaching consequences.”
-Andrew Lo, from his book Adaptive Markets: Financial Evolution at the Speed of Thought
As we build out our ‘This Day in Stock Market History‘ archives, I like to go into more detail on events that I believe offer important lessons for investors, had significant historical impact, or events that are just simply interesting.
This week in history, on January 28th, 1986, an event occurred that meets all three of these criteria – The stock market’s behavior after the explosion of the Challenger space shuttle.[continue reading…]