The Weak Form: says that public trading data such as trends in prices (technical analysis) is built into the stock price. If everyone has access the same trading data, no one can gain an edge by using it. By the time, you can identify a trend and act on it, it is too late. Therefore, technical analysis is debunked under the weak form. The implication of the weak form is that one can gain an edge (beat the market) by using the other public information such as balance sheet and income statement data - fundamental analysis. One could also gain an edge by using private information.
The Semi Strong Form: says that all public information (trading data and fundamental information) is built into the stock price and therefore if everyone has access to the same information, neither technical analysis nor fundamental analysis will help you beat the market. By the time, you identify trends or use fundamental data to gain an edge, it is too late because markets have already incorporated this information into stock prices. The implication is that the only way to beat the market is by using private information.
The Strong Form: says that all public and private information is already built into the stock price and the implication is that technical analysis will not help you beat the market, fundamental analysis will not help you beat the market and even if you had private information, you will not be able to beat the market. As a result, the best strategy would be to invest passively by buying index funds and ETFs. These investments just try to match the market and a result, have very low fees and low tax implications.
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