Studying historical prices in order to identify mispriced stocks will is ineffective even when the market is only weak form efficient. According to the efficient markets hypothesis, market prices accurately reflect all currently available information about a stock, and this information is uniform.
These observers further assert that rather from being the result of excessive or foolish speculation, asset bubbles are caused by information and expectations that are changing quickly. Investors may find it difficult to identify the peaks and troughs of stock in an economic cycle when the entire market is in a bull or bear run. Market participants could disregard information about a company.
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