Efficient market theory is pretty much bullshiet for MORE than 10 years.
A lot of "academics" in finance (ones who are more focused on consulting fees than actually making a valid hypothesis) supported the EFM just because it meant that their "school of thought" was still valid and useful in making tenure.
What I just said its pure fact. Cannot be disputed.
Anyways, IQ and SAT score has a very high correlation with hedge fund manager returns. Just look at Soros.
The reason Madoff was a hoax was not because he made positive returns. Its because HE ALWAYS MADE THE EXACT SAME RETURN YEAR OVER YEAR with zero volatility. That article is partly disigenuous in their description of why Madoff should have set off alarm bells.
Seriously though, people knew the EFM was crap more than 10 years ago. It's just that some academics finally tried to implement their theory into the real world and found out they were wrong in the past 10 years. Its always okay to have stupid people in the market though, because those are the ones you make money off of. Those academics should stay away from finance/economics, and just stick to something like administration.
This is pretty much my theory about EFM after having studied Economics at Berkeley and University of Chicago. Of course, along the way I have been taught by many really good professors who knew EFM was wrong, but just politically, they didn't want to piss of their colleagues who they depend on for research quotes. Which is just a way for them to make a living. Which is perfectly valid IMO, seeing how most academia is. As long as they knew it was wrong inside and didn't talk too much about it to their students.