Global Matters Weekly – Diversity of Time Horizons

A commonly accepted definition for market efficiency is “the degree to which market prices reflect all available, relevant information”. Given the speed with which news is now disseminated around the world, along with the rapid growth in algorithmic trading, one might expect markets to be reasonably efficient.

I am going to introduce a new concept that we take advantage of called, “diversity of time horizons”, a phrase coined by Lyrical Asset Management; and also outline some examples that demonstrate how irrational investors can be at times and the extent to which time horizons can diverge.