Ask HN: Is the market efficient or not?

The EMH doesn't take in to account arbitrage risk (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1292533) among other things.

Bonus questions: Is it so inefficient that models based on EMH should be replaced? Is there a better assumption we can base finance on?

The old saying attributed to John Maynard Keynes is that the market can remain irrational longer than you can remain solvent.

I don't believe it is in the short term efficient nor that its self-correcting, in the short term. In my opinion, the only way to reliably make money is to have insider information. People day-trading with no non-public information are trying to extract patterns from noise.

A market's efficiency is inversely proportional to its complexity -- proportional, that is, to the average understanding of its participants.