In this issue we write about a topic the media have been putting out recently. Is the market in an AI bubble? In reality we will not know without the benefit of hindsight. An efficient market fundamentalist will firmly believe that bubbles cannot exist (markets prices being a reflection of cashflow expectations and risk perception).
The efficient market hypothesis is just a model - Eugene Fama will be the first to admit this - and the reality may well be quite different (it's hard to believe that emotional behaviour doesn't creep into price movements). Regardless, investors would do well to act as if markets are efficient, as few - if any - possess any ability to dip into and out of the market successfully.
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