Favorable Evidence of the EMH Early evidence was favorable to EMH, but more recent evidence suggests it is not always correct Investment analysts and mutual funds don't beat the market O The only proven method to beat the market is trading on insider information, which is illegal in the US, but legal in other countries, such as Germany. Stock prices reflect publicly available info - anticipated announcements not reflected O On average, earnings announcements, stock splits, etc. do not raise the stock prices. Random walk behavior of stock prices Stock prices are not predictable, because if it's predicted to fall (rise), investors would sell (buy) to equilibrium. Technical analysis does not outperform the market O Technical analysis looks at past trends and irregular cycles to predict stock prices, which it cannot accurately do, because stock prices are unpredictable. EMH can be used to predict FX rates (foreign exchange rates - currency) Evidence shows these are unpredictable O