There's a lot of criticism of academics and their rigid beliefs. For example, you could stroll around the Motley Fool discussion boards and find numerous references to critiques of the theory. It's a lot of wasted words, oftentimes with people talking past one another and arguing over semantics rather than ideas. But my two pervasive thoughts on this are:
- It would generate much less disagreement to describe markets as extremely competitive rather than as describing them as "efficient" or "inefficient".
- Believing that markets are efficient is much less likely to cause troubles in your life than believing that markets are inefficient.** If you're going to insist on a black-and-white world, you're better off believing in perfect efficiency.
**Not true if you are a credit analyst relying on spreads for your ratings.