See the discussions at efficient-market hypothesis, random walk hypothesis, capital asset pricing model, Fed model Theory of Equity Valuation, market-based valuation, and behavioral finance.

# The efficient-market hypothesis postulates that equilibrium market prices fully reflect all available information, or to the extent there is some information not reflected, there is nothing that can be done to exploit that fact.

The models of Muth and Lucas ( and the strongest version of the efficient-market hypothesis ) assume that at any specific time, a market or the economy has only one equilibrium ( which was determined ahead of time ), so that people form their expectations around this unique equilibrium.

Economists cite the efficient-market hypothesis ( EMH ) as the fundamental premise that justifies the creation of the index funds.

The efficacy of both technical and fundamental analysis is disputed by efficient-market hypothesis which states that stock market prices are essentially unpredictable.

Academics such as Eugene Fama say the evidence for technical analysis is sparse and is inconsistent with the weak form of the efficient-market hypothesis.

* Efficient market theory, a theory about financial markets, see efficient-market hypothesis

In finance, the efficient-market hypothesis ( EMH ) asserts that financial markets are " informationally efficient ".

The efficient-market hypothesis was developed by Professor Eugene Fama at the University of Chicago Booth School of Business as an academic concept of study through his published Ph. D. thesis in the early 1960s at the same school.

Empirical analyses have consistently found problems with the efficient-market hypothesis, the most consistent being that stocks with low price to earnings ( and similarly, low price to cash-flow or book value ) outperform other stocks.

Although the efficient-market hypothesis has become controversial because substantial and lasting inefficiencies are observed, Beechey et al.

The efficient-market hypothesis emerged as a prominent theory in the mid-1960s.

In 1965 Eugene Fama published his dissertation arguing for the random walk hypothesis, and Samuelson published a proof for a version of the efficient-market hypothesis.

Beyond the normal utility maximizing agents, the efficient-market hypothesis requires that agents have rational expectations ; that on average the population is correct ( even if no one person is ) and whenever new relevant information appears, the agents update their expectations appropriately.

There are three common forms in which the efficient-market hypothesis is commonly stated — weak-form efficiency,

Investors and researchers have disputed the efficient-market hypothesis both empirically and theoretically.

Empirical evidence has been mixed, but has generally not supported strong forms of the efficient-market hypothesis According to Dreman and Berry, in a 1995 paper, low P / E stocks have greater returns.

Noted financial journalist Roger Lowenstein blasted the theory, declaring " The upside of the current Great Recession is that it could drive a stake through the heart of the academic nostrum known as the efficient-market hypothesis.

Critics such as Eugene Fama typically support the efficient-market hypothesis.

Neoliberals justify their views through the work of Hayek, who viewed the free price system of free markets as a system which exchanged information very efficiently about the state of the economy as prices fluctuated to supply and demand, an idea which was developed into the efficient-market hypothesis.

This ultimately led to the creation of the Random Walk Hypothesis, and the closely related efficient-market hypothesis which states that random price movements indicate a well-functioning or efficient market.

The efficient-market hypothesis claims that financial prices always exhibit random walk behavior and thus cannot be predicted with consistency.

One of the strongest arguments for the buy and hold strategy is the efficient-market hypothesis ( EMH ): If every security is fairly valued at all times, then there is really no point to trade.

Proponents of the efficient-market hypothesis claim that prices reflect all available information.

* They may be skeptical of the efficient-market hypothesis, or believe that some market segments are less efficient in creating profits than others.

Peter Lewyn Bernstein ( January 22, 1919 – June 5, 2009 ) was an American financial historian, economist and educator whose development and refinement of the efficient-market hypothesis made him one of the country's best known authorities in popularizing and presenting investment economics to the general public.

In a 1999 response to Malkiel, Lo and McKinlay collected empirical papers that questioned the hypothesis ' applicability that suggested a non-random and possibly predictive component to stock price movement, though they were careful to point out that rejecting random walk does not necessarily invalidate EMH, which is an entirely separate concept from RWH.

Market strategist Jeremy Grantham has stated flatly that the EMH is responsible for the current financial crisis, claiming that belief in the hypothesis caused financial leaders to have a " chronic underestimation of the dangers of asset bubbles breaking ".

The traditional answer to this problem is the efficient market hypothesis ( in finance, the efficient market hypothesis ( EMH ) asserts that financial markets are efficient ), which suggests that the small shareholder will free ride on the judgments of larger professional investors.

This hypothesis contradicts the principle of mediocrity, which SETI takes as an assumption.

Parallels made by proponents of the AAH between humans and the proboscis monkey, which shows mainly behavioral adaptations to a water-based habitat, contradicts any claims of anatomical evidence for the hypothesis.

Observed and repeatable anomalies eventually challenged those hypotheses, and further steps were taken by the Nobel prizewinner Maurice Allais, for example in setting out the Allais paradox, a decision problem he first presented in 1953 which contradicts the expected utility hypothesis.

His name is particularly associated with what is commonly known as the Allais paradox, a decision problem he first presented in 1953 which contradicts the expected utility hypothesis.

As with other forms of technical analysis of stock price movements, the Gann angle model contradicts the weakest form of the efficient market hypothesis which states that past price movements cannot be used to forecast future price movements.

The evidence for this hypothesis is slender, however, and it contradicts contemporary sources which prove that Schubert's Symphony No. 6 ( also in C major ) was performed at this instance.

# the reported behavior in thousands of abduction reports contradicts the hypothesis of genetic or scientific experimentation on humans by an advanced race ;

This amount of aberration is observed and this contradicts the complete aether drag hypothesis.

# The speed of light is not composed by the speed of light in vacuum and the velocity of an aether that would be dragged within or in the vicinity of matter, by a, c, and d. This contradicts the hypothesis of the complete aether drag.

Another test that Weber ran that contradicts the random walk hypothesis, was finding stocks that have had an upward revision for earnings outperform other stocks in the forthcoming six months.

By hypothesis the projection R →( R / m ) sends ST to 0, and also at least one of S, T individually, which means that its coefficients all lie in m, which contradicts the fact that they generate the whole ring as an ideal.

As it was already pointed out by Michelson in 1904, a positive result in such experiments contradicts the hypothesis of complete aether drag.