Few Ph.D papers have been more influential than economist Eugene Fama’s 1965 thesis.
Fama’s hypothesis helped spark a school of thought in finance that held that all efforts to beat the stock market over the long term were futile.
Called the efficient market hypothesis, it maintains that all of the relevant information concerning a company’s prospects would already be known and “priced into” the stock.
Individual investors might pick a stock they felt could yield outsized returns, and a few might get lucky and beat the markets for a short while.
But the efficient market hypothesis held that eventually, investors’
