According to the Article “What is Market Efficiency?”, what are:

Efficient Market Hypothesis (EMH)

An efficent market hypothesis says that no person can out preform the market, because at the end of the day everything evens out. Although it may seem like some people come out with better outcome, in the end some people buy low on the market but some people buy high, but someone has to be buying and selling whether it be low or high. The fluxuation of the market is unpredicable, but the market will always be ontop when everything is said and done.

Behavioral Finance

Behavioral Finance is when people believe that they have mastered the fluxuations of the stock market and feel that they can predict what is going to happen next, they begin making psychologicaly based theories about the market. People try and look at the market and find characteristic that will help create a long term prediction about the market.

January Effect

During the month of January there is an increase in stock prices due to many shareholders selling stock after the month of December because they feel like after christmas the stock has hit its peak and the fear of tax loss. Now that people are“using tax-sheltered retirement plans” the January effect has become more or less unimportant because there is no longer the fear of tax lose.

"How does a market become efficient?"

The ideas and schemes that investors come up with are what keep the market efficent. When pinvestors feel like they can beat the market they come up with irrational ideas that end up putting more money into the market, making it more efficent.

My Ideal Car

My idea car would be a car that will last a long time, long enough to at least out live its depreciation value. Sometimes I wrestle with the idea of leasing a car or owning a car, but both seem equally as risky. When leasing a car I would not have to pay as much per month as owning a car. Another reason is that I could always bring the car back and trade it in for a newer car of my choice at the end of the lease. The downside to leasing is that if you go over the set number of miles for the leasing time or bring the car back with even a minor damage the leasing company will heavily charge you. The good part about owning a car is, you own it. The downside is that you pay a higher monthly fee and you lose money for the cars depriciation. My ideal car would have to be a Mercedes-Benz because it last a long time, or atleast longer than its deprciation value, it has a great miles per gallon ratio, and it is very easy on the eyes.

Greenback Blues Article

In the article Greenback Blues, by James Surowiecki, he discuses the finanical stregth of the American dollar and its decline. Even euros and Candian money have become equal to the dollar. The author writes that in theory because we spend about 1.8 trillion dollars on imported goods, other countries should be making more money than America. But in American we don’t see the effects of the decline of the dollar because of countries like China. China helps prop the american dollar up by lowering the cost of their goods inorder to compensate for the decline of the american dollar. China lowers their prices because America is their biggest consumer of their chinese goods, and is their prices were to high they wouldn’t have as much of a fluid economy. As a result, China is actually loosing money or atleast not making as much money as they possibly could by lowering their prices to help out the American dollar.