Not a good estimate or even a right estimate, but just an estimate. As I said before this is where I believe EMH takes a leap of faith. I would certainly agree with this, but I think this highlights precisely why a majority of market participants can end up being incredibly wrong. During the dot com boom everyone had the same information available, but suddenly the majority of investors ignored earnings and started looking at fancy things like potential clicks per second. I don't disagree that the market shows the current sentiment of all participants in a more or less instant manner, that is precisely what a market is. But I just do not believe that people are rational and therefore markets efficient. This is the crux, EMH believes that buyers and sellers are much more rational than they actually are. Large scale irrationalities like the dot com and housing boom are common enough, and so are individual undervalued securities. I think that value investing is often over simplified when it comes to the work involved. I also think that just looking at institutional investors is a poor yardstick, even if it is the only practical one really. My personal portfolio has at times been very un-diverse and an institutional investor would probably never be able to sell such a portfolio as a fund. But taking the value investment approach to choose stocks has given me an above average return in 9 out of 10 years. Now of course this is a pretty short time period, and that theoretically could reverse. But applying the same rules my dad has "beat the market" in 26 or 27 out of 30 years. Without a doubt, there are thousands of institutional investors out there, but I do not believe that value investing makes up a large portion of them. Generally I find they are way to over analytical and fancy in their ideas and often stray way too far from the basics. I think EMH and its most public proponents are extremely vague and even dismissive when it comes to rationality. While the information reflected in the prices certainly is correct, to a large extent, the prices are quite often not a correct reflection of that information. But this is something that EMH seems to largely dismiss as a rare occasion. I wouldn't disagree that most fund managers make most of their money on their fees, but that doesn't mean that you cannot assess the success of their stock picking. Yes, looking at just the fund performance will often reveal a below market performance because of the fees. But we are not just talking about people investing in funds. A more accurate assessment would be an evaluation of the underlying asset values of value funds or investors. Risk is always a subjective assessment and I think it is not very sensible to generalise risk in this way. The majority of people would argue that my current portfolio is way too risky, but in my interpretation of the available information I have reduced my risk. When I find an undervalued stock, I look at it in the same way. I do not see myself taking more risk than others.