Is the efficient market hypothesis true or false?

It seems like the only info I get is a description of the theory and the tests used to verify the weak, semi-strong, and strong forms. It also seems like value investing, Warren Buffet style, proves it wrong, or proves that it doesn't matter if prices of securities reflect all known information in a stock, since stock prices can be underpriced due to market emotion. Can anyone explain?Is the efficient market hypothesis true or false?
I think that in the long run the EMH is probably true and that the market will eventually reflect all known information about a stock. However, in the short-term, investors can react irrationally and good research can lead to superior results.





If you have an idea that is different and correct from the rest of the market, you can make a fortune.





There are also pockets in the market where EMH is more true than others. Large Cap Value stocks for instance often have a lot of the information priced in and companies share openly with analysts as much information as possible - it is difficult to gain an edge here. Small cap growth companies however have much less known about them and often have inefficiencies skilled analysts/investors can exploit.





Good luck!Is the efficient market hypothesis true or false?
False.





You are right - the market is driven by fear and greed, and no theory can fully account for irrational behavior.
The theory is false. Stocks cannot possibly reflect all known information, since the definition of ';known'; is relative. Does ';known'; mean known by all or just a few? There will always be certain groups that are more privy to the correct information thatn others. The trick is to buy stocks in which you are in the priveledged group.
False.





You don't really think a web page like http://www.google.com is more important, expensive or profitable than Ford, General Motors and Chrysler COMBINED, do you?





We can live without Google but we cannot really survive without cars.





What are we going to do?


Use horses again?





You can buy a lot of companies with $156 Billion. (This is what Google's worth)





Come on.


That's enough to start your own Oil Company.





And everybody knows the fastest way to make a trillion is selling Oil.





Actually Tesoro is worth only $6 Billion and they make over $800,000,000 in profits and Google only makes $3,000,000,000.00 in profits.





Actually Valero is worth only $35 Billion and they make over $5,000,000,000.00 in profits.





You can buy enough Oil Companies and make at least $10,000,000,000.00 in profits with that kind of money.
True... but with an asterisk





true... for the market in general all know information is fairly balanced to reflect current risks and potential. When the news changes so too does the market.... had the fed not cut the discout rate today do you think the market would still have been up? does that make last weeks sell off wrong?





* false... frequently it is driven out of whack by fear and greed from investors.... but the market is efficient in that it always comes back to reflect what is know and those people driven by emotion are punished.





Buffett doesnt disprove the efficient market... he is just better than the market at filtering the news and determining what will happen and what will be successful...





cheers

good myspace