Efficient Market Hypothesis: Statistical Evidence
A finance professor and a student are walking down a busy sidewalk. Along the way, the professor is discussing efficient markets with his student, who is staring down in studious thought. The student catches a glimpse of a $20 bill on the sidewalk, and he stops to pick it up. After pocketing the bill, the student runs to catch up with the professor. The excited student asks the professor if he had seen the bill, and the professor, without skipping a beat, quips "My dear student, have you not been listening to any part of the efficient markets that I've been talking about? Yes, I saw the $20, but I knew that my eyes must have been deceiving me. Efficient markets theory dictates that it couldn't possibly have been there, since someone else would have already picked it up."