the stock market figured out who caused the Challenger disaster within hours

How I got here

Started with

How can markets 'know' things nobody has said publicly?

Ended at

Efficient-market hypothesis

The Trail

1. “challenger disaster thiokol stock price same day” (google.com)
2. Space Shuttle Challenger disaster (en.wikipedia.org)
3. Thiokol (en.wikipedia.org)

   fell sharply that day while the other shuttle contractors mostly recovered

4. Rogers Commission Report (en.wikipedia.org)

   Feynman's appendix is the best part

5. The Use of Knowledge in Society (en.wikipedia.org)
6. Friedrich Hayek (en.wikipedia.org)
7. Efficient-market hypothesis (en.wikipedia.org)

What I came away with

Of the four big shuttle contractors, Morton Thiokol's stock fell far more than the others within hours, months before the commission traced the disaster to the O-rings in Thiokol's boosters. A 2003 study found no evidence of insider trading. Hayek's 1945 essay is the classic explanation: prices pack scattered knowledge into one number.

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