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What Is the Efficient Market Hypothesis?

By Jeremy Bowman – Updated Nov 22, 2024 at 11:22AM

Key Points

  • The efficient market hypothesis claims market prices reflect all known info, making outperformance tough.
  • Critics argue that stock valuations depend on expectations about future cash flows, not just known info.
  • Bubbles and insider information suggest prices don't always fully reflect all available information.
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