Four Pillars of Investing - Efficient Market Theory!?!?

[Running_Man]

I just picked up the Four Pillars of Investing from the local library. For one I have never believed in the efficient market theory. Mr Bernstein does however and as prove shows how the top 10% of funds over a 5 year spread drastically underperform the market in following years. The fact that one can easily identify funds that will underperform the market by a large margin with statistical certainty DISPROVES the idea that the market is random. The proving of either side disproves the point he is using in favor of indexing.

This also seems to miss the point indexing and it's growing popularity in the Vanguard nation has never been tested in a prolong downturn as in the 1966-1982 market or the 1930's. In the 30's the equivalent of mutual funds were investment trusts which for the most part all went belly up. It is conceivable with a large following of index investors a panic of selling will actually hurt indexers far worse than individuals holding stocks not in an index. Such as perhaps DSX...
Every organized collective of financial genius where the public does not have to think for themselves and instead can trust the collective genius of financial gurus has lead to the discrediting of that form of investing.

I have seen this book reccomended along with the Intelligent Investor and the 2 could not be more different.

Any business can be priced, otherwise there would be no purchases of companies by other companies. Knowing what to pay for a company was well illustrated in another thread earlier today on these boards. The idea that it can't be done is so well accepted as to make it's practice all the more profitable in the long run.