The Efficient Markets Hypothesis posits that asset prices in financial markets systematically reflect all publicly available information at any given moment. Consequently, it is mathematically impossible for investors to consistently achieve above-average returns by exploiting public data alone because new information arrives randomly and instantaneously, rendering stocks as random walks with an upward drift relative to the market average. This theory operates within the domain of financial economics under the parent discipline of investment strategy, establishing that systematic outperformance based on known facts is a logical fallacy due to the equal informational distribution between buyers and sellers.
The Efficient Markets Hypothesis posits that asset prices in financial markets systematically reflect all publicly available information at any given moment. Consequently, it is mathematically imposs…