Economics

The market that supposedly already knows everything

In 1970, economist Eugene Fama formalised the efficient-market hypothesis: stock prices instantly reflect all available information, making it near-impossible to consistently beat the market by acting on public news. He split the idea into weak, semi-strong and strong forms. It won Fama a share of the 2013 Nobel Prize — awarded the same year as a rival who argued markets are often irrational.

Eugene F. Fama, Efficient Capital Markets: A Review of Theory and Empirical Work — Journal of Finance, 25(2), 383–417 (1970)

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