Do you agree or disagree with the content and give an example of efficient market hypothesis when it is weak.

The efficient market hypothesis originated from a dissertation written by Eugene Fama who was studying for his PhD. It states, in short, that at any given time and in a liquid market, security prices fully reflect all available information. This theory has three main levels of strength: weak, semi-strong, and strong. These levels focus on the inclusion of non-public information in market prices. The hypothesis three levels can be explained as follows: the weak form proposes that past pricing and volume information do not have any relationship with any potential future trends. The semi-strong level suggests current stock prices will adjust quickly to the release of all new public information. Last the strong level presumes current stock prices fully reflect all public and private information. The efficient market hypothesis aligns the likelihood of the markets response with the release of information, or lack thereof. It may contribute to the prediction of strong financial decisions, but ultimately that responsibility should rest with the financial documents.

Financial statement analysis, which is the process of reviewing and evaluating a companys financial statements (Financial Statement Analysis, n.d.), is the only true way of deciding what will be best for an investor. While the efficient market hypothesis can be a tool used for some investing decisions it does not provide any concrete evidence of the best choice. Financial Statements and other documents do. First, any and all public information can yield a strong indication of where a company is heading. Here an investor would be able to see the hard facts and figures as opposed to guessing where they should invest their funds. If I were investing I would be less interested in a hypothesis and more interested in the overall performance of a company. There the income statement, balance sheet, and statement of cash flows would be my preferred references. It may take more time, but ultimately the results will be stronger than relying on a volatile stock market.