Efficient Market Hypothesis
The efficient market hypothesis (EMH) is a hypothesis that prices reflect all information, so nothing is truly "overvalued" or "undervalued." An example is the fact that there is no reliable strategy to make money in the stock market, because if such a strategy existed, its overuse would cause prices to adjust, to the point of making itself no longer a useful strategy.
The EMH is only true the extent that there is perfect information in the market, however, it is rarely true that a given trader has truly proprietary information, therefore the EMH serves as a useful baseline.
More broadly, the EMH is part of the following mental model. In any Darwinian process (such as a market), agents will act to fill any available niche. Agents will exploit growth frontiers like a liquid filling a hole. This follows from the premises that (A) the number of agents is sufficiently large, and (B) agents seek growth, however growth is represented within that Darwinian process.