FT.com / MARKETS / Equities - Crisis of faith for high priests of rational markets:
"The British CFA recently asked its members for the first time if they trusted in “market efficiency” – and discovered that more than two-thirds of respondents no longer believed that market prices reflected all available information.
...77 per cent of the CFA group also “strongly” or “very strongly” disagreed that investors in aggregate behaved “rationally” – in apparent defiance of the “wisdom of crowds” idea that has driven much investment theory.
The shift is significant as the assumption of efficient markets is a cornerstone of the financial calculations of valuing everything from stocks to pension fund liabilities to executive compensation.
William Goodhart, chief executive of the CFA Society of the UK, on Monday admitted that the results showed a new mood of “questioning” following the financial crisis."