Are the markets always efficient?

Eugene Fama is renowned for his efficient market hypothesis (EMH), which argues that stock prices reflect all available information, making it nearly impossible to consistently outperform the market. This theory earned him the Nobel Prize in Economics in 2013, though it remains widely debated today.

The rise of artificial intelligence has challenged Fama’s ideas, as a few trillion-dollar companies dominate the market. Fama acknowledges that EMH is “just a model, and imperfect".

Behavioral economics, often seen as the opposite of EMH, suggests that human irrationality fuels market bubbles. Data shows that most stock pickers fail to beat the market, leading to a shift from actively managed funds to cheaper, passive ones.