The stock market's ups and downs in the last few weeks pose a challenge to the efficient market hypothesis. How can the FTSE 100 possibly have been fairly priced at 6800 in September, 6200 in mid October, 6700 in November, 6200 again in mid-December, and 6800 now? Surely, some of these prices were wrong. Isn't this evidence that markets are inefficient? And if so, how can I possibly recommend tracker funds, the logic for which rests upon the idea that markets are efficient?

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