Richard Foster is a managing partner of Millbrook Management. He is a former McKinsey director and co-leader of the private-equity practice.
Juan Ocampo is the president of Trajectory Asset Management and a former partner at McKinsey.
Lying at the heart of the most common market theory—the efficient-market hypothesis—is the assumption that financial returns, including stock prices, are independent of one another. We now know without any doubt that this assumption is wrong.
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