First expressed by Louis Bachelier in his dissertation, "The Theory of Speculation", its weak version states that prices should reflect all available information, while the strong form asserts that prices also reflect hidden information.
Odean's work demonstrating the failure of momentum strategies has lended support for it, while Lesmond et al find that relative strength strategies similarly fail. A key methodology in studying it is the "event study" which as a whole find no systemic over or underreaction biases. Grossman and Stiglitz argued that this idea was paradoxical on the grounds that it would imply that firms had no incentive to improve. Alternatives to this idea have been proposed by Andrew Lo centering around the idea of adaptation. First expressed by Louis Bachelier in his dissertation, "The Theory of Speculation", its weak version states that prices should reflect all available information, while the strong form asserts that prices also reflect hidden information. For 10 points, identify this economic doctrine espoused by Eugene Fama which colloquially asserts that one cannot consistently beat the market.
Odean's work demonstrating the failure of momentum strategies has lended support for it, while Lesmond et al find that relative strength strategies similarly fail.
efficient markets hypothesis