In this short article, the EMH concept is going to be explained.

First of all, the EMH says that financial markets are efficient in the sense that the share price reflects the information of the events already happened and the ones which the market expects to happen. This argumentation implies that the market price of a security is the most realistic and ‘true’ estimate of the real price of a security. It also assumes that the market is populated by many rational investors that compete against each other for making excess returns.

Fama, the most famous supporter of EMH, also states that there are three forms of efficient market:
- the strong form efficient market, where all relevant information, either private or public, is available to all investors. Here the share price is the most reliable estimate for the share value and even insider trading, which is anyway illegal, does not provide excess returns. This market form happens just sometimes.
- the semi-strong form efficient markets are markets where public information is incorporated in the share prices and available to all investors and fundamental analysis, which is the study of the companies and their performance, is not useful to make excess returns. This form of market happens most of the time.
- in the weak form efficient market the price incorporates only historical information, which is known to everyone. This form of market happens all the time, and share prices cannot be predicted through even technical analysis, which is the study of past price trends

However, are we sure that EMH is still valid today with the introduction of computerised trading software, the internet, socials, in a historical period when high-frequency traders buy and sell shares and other securities as quickly as we could not have possibly imagines just a few decades ago...