Doesn't the semi-strong form of the EMH conflict with expecting stock indices to increase in the long run? I willfully don't define &quot;long run&quot;, as I'm certain you economists can do this better! Please edify me on a reasonable number, and I can edit this post.

I quote Malkiel's definition of &quot;semi-strong&quot; beneath. As he doesn't believe in the EMH's strong form, and he knows far more about finance than I, I too don't believe in it.

Doesn't the EMH's semi-strong form jar with explanations on Personal Finance SE on why stocks can be expected to rise in the long run?



Burton Malkiel. A Random Walk Down Wall Street (12 edn 2019). Anyone know the page numbers?
THE SEMI-STRONG AND STRONG FORMS OF THE EFFICIENT-MARKET HYPOTHESIS (EMH)
The academic community has rendered its judgment. Fundamental analysis is no better than technical analysis in enabling investors to capture above-average returns. Nevertheless, given its propensity for splitting hairs, the academic community soon fell to quarreling over the precise definition of fundamental information. Some said it was what is known now; others said it extended to the hereafter. It was at this point that what began as the strong form of the efficient-market hypothesis split into two. The “semi-strong” form says that no public information will help the analyst select undervalued securities. The argument here is that the structure of market prices already takes into account any public information that may be contained in balance sheets, income statements, dividends, and so forth; professional analyses of these data will be useless. The “strong” form says that absolutely nothing that is known or even knowable about a company will benefit the fundamental analyst. According to the strong form of the theory, not even “inside” information can help the investors.
      The strong form of the EMH is obviously an overstatement. It does not admit the possibility of gaining from inside information. Nathan Rothschild made millions in the market when his carrier pigeons brought him the first news of Wellington’s victory at Waterloo before other traders were aware of the victory. But today, the information superhighway carries news far more swiftly than carrier pigeons. And Regulation FD (Fair Disclosure) requires companies to make prompt public announcements of any material news items that may affect the price of their stock. Moreover, insiders who do profit from trading on the basis of nonpublic information are breaking the law. The Nobel laureate Paul Samuelson summed up the situation as follows:

If intelligent people are constantly shopping around for good value, selling those stocks they think will turn out to be overvalued and buying those they expect are now undervalued, the result of this action by intelligent investors will be to have existing stock prices already have discounted in them an allowance for their future prospects. Hence, to the passive investor, who does not himself search for under- and overvalued situations, there will be presented a pattern of stock prices that makes one stock about as good or bad a buy as another. To that passive investor, chance alone would be as good a method of selection as anything else.

      This is a statement of the EMH—the efficient-market hypothesis. The “narrow” (weak) form of the EMH says that technical analysis—looking at past stock prices—cannot help investors. Prices move from period to period very much like a random walk. The “broad” (semi-strong and strong) forms state that fundamental analysis is not helpful either. All that is known concerning the expected growth of the company’s earnings and dividends, all of the possible favorable and unfavorable developments affecting the company that might be studied by the fundamental analyst, is already reflected in the price of the company’s stock. Thus, purchasing a fund holding all the stocks in a broad-based index will produce a portfolio that can be expected to do as well as any managed by professional security analysts.
The two propositions here are:


EMH: I can't predict which stocks will do better than average.
The average stock will increase in the long run.


1 does not contradict 2.



Analogy: I am in a room full of babies.


EMH: I can't predict which of these babies will be the tallest in 20 years.
Nonetheless, I can predict that in 20 years, these babies will be taller than they are today.