Barry O’Neill’s P&J article explains why prices reflect probabilities...

In Monday’s Press & Journal, Carbon’s Investment Director, Barry O’Neill explains that the beauty of well-functioning investment markets is all the available information is processed by market participants and finds its way into security prices.

Barry demonstrates this by explaining how Leicester City’s remarkable Premier League triumph can be compared to betting on the stock market.

The football club started the season with bookmakers offering odds of 5,000-1 on them being champions. However, as the season progressed, bookmakers quickly revised their odds every time new price sensitive information came to light. As the season came to a close, Leicester City were 10/11 odds-on favourites to win.

The article is designed to provide a clear explanation of how security prices are forward-looking in the same way betting odds are an expression of the likelihood of a future event occurring.

You can read the full article here, or by clicking on the image below.

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You can view Barry O’Neill’s profile here.