EMH, real life case

We recently attended the Maybank Bali Marathon and couldn’t help but noticing an interesting and recurring phenomenon.

To the credit of the event organiser, a good number of portable toilets was made available to the 10,000+ runners who attended this year.

The very adorable local kids cheering the runners

The very adorable local kids cheering the runners

Oddly, however, we saw some of the portable toilets having very long queues while others seemed abandoned.

Out of curiosity, we asked the people standing in queue around us what was wrong with the abandoned toilets and it appeared that nobody knew the reason.

At the same time, no one was willing to take the risk of losing their spot in the queue only to learn that the abandoned toilets were “undesired” for a good reason.

In contrast to what a believer in the efficient market hypothesis (EMH) would have expected, we found out that the ignored toilets were actually clean and worked perfectly fine.

We have experienced many similar situations in our lives, of course, but time and time again it’s just astonishing to see human’s tendency to follow the crowds.

But, as the large number of people suddenly queuing behind us showed, it sometimes only takes one contrarian – who desperately needed to take leak – to shift the crowds to the other side…


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About Our Blog

This blog covers obser-vations made by our team. It can touch on any subject that we deem relevant for investors in Asean markets.