The Efficient Market Hypothesis looms large in any discussion of the financial markets. Malkiel, Rubenstein, and Siegel discussed the concept in the context of fundamental analysis, challenges posed by behavioral finance, and the implications of extreme market behavior. They also offered a nuanced perspective on how much the EMH resembles reality and how much it needs to resemble reality to remain a useful construct.

What is the accuracy and usefulness of the EMH as a way to think about the markets and as a guide to action as an investor?

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The Efficient Market Hypothesis EMH is a widely debated theory in finance that suggests financial markets are efficient and incorporate all available ... View the full answer