Talking about irrationalism, to begin with, some theories and questions must be introduced in this writing: 1) how EMH works, is thisreliable in the real world; 2) how Momentum Theory against the Efficient Market Hypothesis (EMH); 3) howinvestors would to analyse the information of their potential investments; 4)what outcomes would exist with misevaluation or ignorance of given information;5) how investors behave in the bull markets; 6) what kind of problems wouldexist because of people’s irrational behaviour in the bull markets; 7) whatkind of results would exist with irrationalism.

There are three parts in the EMH: 1) strong; 2) semi-strong;3) weak. Under the EMH, information can influence asset prices. However, thereis no perfect market in the real world, and also market could not really beefficient enough. Therefore, many investors would like to imply the MomentumTheory, which means that there is no difference amongst both informed investorsand ‘naive’ investors (have non-or-less information). In addition, it is obvious that, in fact, many of informed investors will misevaluate some given information, this maybe due to communication barriers (such as language,technology etc.). Also, investors will possibly judge the information by their previous experience: keep the importance and ignore the 'rubbish'. Thus, the asset prices would be overvalued-or-undervalued while encountering those two problems mentioned above, that would cause investors behave irrationally in particular the naive investors.

Bear market usually happens along with bull market, ittherefore is necessary to explain what bull market is, how it comes out. Lookingback into the Tulip Mania that happened 400 hundred years ago in theNetherlands, 2500 florins/ per bulb of tulip (note: 100 florins/ per ton ofbutter at that time). besides, there also are lots of financial crises thathappened in the history, the typical one can be the Subprime Crisis (SC) in the U.S. in2008. The reasons that induce SC could be tremendous, such as asymmetricinformation between intermediaries and customers, and frauds of intermediariesor customers. However, all problems mentioned could be explained via human's behaviour and psychology. To be specific, by introducing Maslow Hierarchy Theory, peopleaim to capture the top of pyramid in order to catch self-esteem orself-actualisation, and so do the companies. Under that ‘red-face’ situation,agents provided relative certificates to many people lacking of credit to buyhouses. In the side of customers, for example, a person who was poor-credit andhad no house, but his friends or people, who were under the same situation tohim, that had/bought houses. Then, his obviously would go to buy one, this also can be explained by herding effect. In other words, most of investors believed thatmarkets would be going up even though they knew there was a bubble. Thoseirrational behaviours of human-being has broken down financial market and caused that the financialcrisis swept from the U.S. to worldwide for a long time. This could worsen economic environment (a fall in inflation or a severedeflation). Some considerations must be concerning, namely: 1)delayed consumption; 2) a rise in interest rates; 3) an increase in debt and adeterrent to borrowing; and 4) people prefer saving to spending due to thelosing confidence. These will lead to a recession or depression.

Additionally, because this is a quick writing and time is limited,examples of financial crisis cannot be introduced here step by step, but justto recall the Great Depression, the financial crisis in Asia in 1998, thebubble of housing market in Japan in 1990s, and the deficit crisis in the PIIGSin recent years. All these existence of crisis can be explained viairrational behaviour of human-beings.

To summarise, there is no market that is efficient in thereal world, even though there have, it would be broken down due to theirrationalism. Therefore, the EMH only can exist while all investors arerational.