Megan McArdle (December 11, 2007) - How can markets be efficient if people are such morons?

Megan McArdle (December 11, 2007) - How can markets be efficient if people are such morons?: "There is, of course, a bit of a puzzle in finance. To wit: how can markets be so efficient that even very smart people with PhDs in finance cannot (on average) outperform a diversified index, when so many of the people buying and selling the stocks are so stupid that they think they can beat the market?"