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Another fallacy in the lead-up to the financial crisis was the assumption that financial markets were so efficient that participants didn’t need to do the underlying work to figure out what the securities were actually worth. Because you could rely on the market to efficiently incorporate all avail…

But isn’t there a strong financial incentive to try to understand why you’re doing what you’re doing, whether it’s an algorithm or a human executing the trades? Otherwise it seems very easy to lose a lot of money.

Sure. But the market structure of investing dilutes that incentive.

The peo…