CAPM also makes use of what is called a definitional identity. This is something that is automatically true, simply because of the way things have been defined.

The cheaper the stock, the better the outlook for future returns.

When you buy a lottery ticket, you don't know how tickets have been sold. But sold they have been. And there is an underlying distribution for the game.

Behaviorists tell us that we tend to overweight and overreact to the most recently received information. If we do, we will find that the information that we thought was so important becomes tempered, and reduced in significance, by new and related information that follows.

In real-world Finance, they don't pay for elegance. They pay for power - predictive power.

Although efficient markets people still go around saying there is a mountain of evidence supporting their hypothesis, the truth of the matter is that it's a very old mountain that's now eroding rapidly into the sea.