If prices already reflect everything we know, can anyone really beat the stock market?

Mostly not, and not reliably, according to the efficient-market hypothesis. It says asset prices already reflect all available information. If news about a company is public, traders who act on it push the price until the news is no longer useful. So consistently beating the market, once you account for risk, should be impossible: prices only move on new information, which by definition nobody can know in advance.

The evidence is a mix. As early as the 1930s, studies suggested professional investors generally couldn't outperform the market, and short-term stock prices behaved like a random walk. That is why even Warren Buffett, a critic of the theory, recommends low-cost index funds for most people.

But the strongest versions of the idea don't hold up. Some kinds of stocks earned unusually high returns for long periods. Robert Shiller showed that prices swing far more than any rational forecast of future dividends could justify, and he warned of a stock bubble in March 2000, right at the peak. And there is a logical puzzle: if prices already contained all information, nobody would be paid to dig up information, so a perfectly efficient market couldn't exist.

The debate is so finely balanced that in 2013 the Nobel Prize went jointly to Eugene Fama, the theory's champion, and to Shiller, its most famous critic.