The Rational Market Hypothesis of Prices

Isabelle: How do stories about rising or falling prices become self fulfilling prophecies? And why, even though there's this mismatch between the speculative bets and the fundamentals, is it still rational for investors to make those bets? Isabelle: The critique of this was made many years ago by kanes, in the 19 thirties. He likens thesp speculative market to a game played in a newspaper,. She says traders are trying to guess what other traders are thinking. But ultimately, it's not information that drives prices; it's traders bet that drive prices.