The article presents a brief history of financial theories: fundamental analysis, technical analysis and modern finance. Particular stress is put on the Efficient Market Hypothesis and the Capital Asset Pricing Model. Various tests of market efficiency are described: none of them exhibit strong form of efficiency. Markowitz´s model and its Sharpe´s simplification are presented as predecessors of CAPM theory. It is shown that CAPM cannot be consistent with the notion of search for the truth, the ultimate goal of science because of its unreal presumptions and impossibility of falsification. Behavioral finance as based on realistic presumptions and faithfully describing the reality of the market is an example of Popperian methodology in social science. Many heuristics, inclinations and biases making financial decisions irrational are described and commented.