Efficient Market Hypothesis

According to the efficient market hypothesis, financial markets take account of new information about traded commodities so rapidly that it is not possible to make profit by “outsmarting the market.” In other words, if a trader attempts to outperform the market by buying or selling stock based on information about the company or commodity, it is already too late. If I learn that the corn crop in Argentina is in trouble because of unfavorable weather during the growing season and so I buy U.S. corn futures, I will not be buying an undervalued commodity, because the commodities market has already adjusted to the bad weather in Argentina, and the price of U.S. corn futures already reflects that information. Many amateur investors could be saved a lot of time and trouble if they understood the efficient market hypothesis.