The efficient market theory proffers that all the information that everyone has about a given company is factored into its stock price, which means that the company is fairly valued. Pay that price or more and you won’t get any return.

Is the market efficient? Most of the time it is. But In periods of exuberance or panic, it’s not. It’s important to be thinking about the efficiency of markets when looking at investment because it’s very hard to find when the market is being inefficient.