What Is the ‘Efficient Market Hypothesis’ and What Are Its Three Forms?

The Efficient Market Hypothesis (EMH) is a theory that states asset prices fully reflect all available information. The weak form asserts that all past market prices and data are fully reflected in securities prices.

The semi-strong form claims that all publicly available information is reflected in prices, making fundamental analysis useless. The strong form, the most extreme version, states that all information, both public and private (insider), is reflected in stock prices, meaning no one can consistently achieve excess returns.