Mainstream economics and finance theories hold that markets immediately adjust to new information. While market prices do ...

At first blush, stock trading this week is hardly a paragon of the market-efficiency theory, an oft-romanticized idea in Economics 101. After all, big equity gauges plunged on Monday, spurred by fears ...

I began this article with the goal of addressing an academic notion, the efficient-market hypothesis, or EMH. My research dissuaded me. In one University of Chicago article, a faculty member questions ...

Forbes contributors publish independent expert analyses and insights. Carrie McCabe reports on asset management, strategy, and investing. In his September 2024 paper, The Less-Efficient Market ...

Discover how price efficiency reflects available information in market prices, explore examples, and understand its limitations within financial markets.

Fama is captain of Team Efficient Markets and Thaler is captain of Team Behavioral Finance. Each represents conflicting academic market philosophies that have been warring for years. Market efficiency ...

The efficient market hypothesis argues that current stock prices reflect all existing available information, making them fairly valued as they are presently. Given these assumptions, outperforming the ...

The return on equity and its more expansive variant, the return on invested capital, measure what a company is making on the capital it has invested in business, and is a measure of business quality.

Weak form market efficiency is a concept that suggests past stock prices and trading volumes do not predict future stock prices. In a weak form efficient market, all historical information is already ...

If no one had ever thought of that one, we all would have been market timing all along. In every other market that exists, people buy more of the thing offered for sale when it is priced well than ...

Discover how market anomalies challenge efficient market theory by exhibiting unusual stock patterns. Learn about recurring phenomena and potential impact on investments.