The efficient market hypothesis is a lot like Newtonian gravity. It's not a perfect theory, but it's a pretty close approximation that pretty much covers most a

The efficient market hypothesis is a lot like Newtonian gravity. It's not a perfect theory, but it's a pretty close approximation that pretty much covers most any domain outside very exotic conditions. If somebody comes up to you, a random Joe Schmoe, and tells you they have an investment that consistently beats the market on a risk-adjusted basis. Well... You can pretty much guarantee that they're full of shit. Even just analyzing papers that passed the rigor of academic peer review, the sizable majority of market anomalies fail to replicate on an out-of-sample basis[1]. Like Newtonian gravity, to the extent that deviations exist it's either of very small magnitude or in very exotic conditions. The market anomalies that do exist, like the HML value effect or momentum effect, don't substantially improve the optimal portfolio and go through very long periods of deep drawdowns. Or in the realm of the very exotic, there are small teams, in aggregate making up much less than 0.1% of the market, that do consistently out-perform. There common characteristics of these strategies are that they have tightly limited capacity, involve a huge up-front investment in technology and expertise, almost never offer to manage outsider money, and are extremely hard to replicate even by other experts. [1] https://www.nber.org/papers/w23394 https://www.nber.org/papers/w23394