Efficient Market Hypothesis (EMH)
Chapters in this video
- 0:00 EMH and the multiplayer game
- 1:36 Weak form: technical analysis dies
- 2:14 Active Annie's charting strategy in weak form
- 2:54 Semi-strong form: fundamental analysis dies
- 4:06 The most tested exam trap on semi-strong
- 4:33 Strong form: even insider information dies
- 5:43 Memorizing the three-form comparison table
- 6:09 Active versus passive: why Ivan beats Annie
- 7:10 Rapid-fire exam recap
What this video covers
- Why the weak form of EMH makes technical analysis useless, but still leaves room for fundamental analysis and insider information
- How the semi-strong form is the most commonly tested form, and why fundamental analysis based on public financial statements cannot beat the market
- Which specific form of EMH a question is describing when it shows an investor reading public news or filings to find undervalued stocks
- Why the strong form says even insider information is useless, yet why insider trading regulations exist as direct evidence against it
- How to read the classic three-column comparison table showing which analyses fail as information sets expand from historical to public to private
- Why EMH inherently supports passive management and index funds, and why active management fees are mathematically wasteful under semi-strong or strong efficiency
- The exact wording traps the Series 65 uses: "fully reflect all available information" does not mean prices are always correct, only that mispricings are quickly corrected
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 65 course also includes adaptive practice questions and spaced-repetition flashcards, free through December 31, 2026.