ABSTRACT
Market efficiency seems to have its roots in the idea of intrinsic value. Although the value of most goods is acknowledged to be a function of consumer beliefs, preferences, and endowments, securities have often been treated as having a value independent of these consumer characteristics. Their value is based on the characteristics of the firm behind the security. The basic problem with the efficient market hypothesis and the theory of random walks is that they concentrate exclusively on the security itself and the information relating to it. The demand side of the market is trivialized. All the idiosyncrasies of human nature are ignored. Furthermore, all the homogeneous investors are locked up in a static world. There’s plenty of evidence to support their view. Self-affinity designates a property that’s closely related to self-similarity, since it also involves a transformation from a whole to its parts. But it’s not a similarity that reduces both coordinates in the same ratio.
