Ran Into This On Web in 403(b) Forum Posted March 24, 2007 · Report reply I'm really surprised that the "random walk" theory still has any believers at all. I always laugh when I read people quoting Warren Buffett (out of context, of course) saying that index funds are the best solution for most people. I've done a lot of reading of Buffett's work over the past year, and his body of work (both written and actual examples of his investment) completely contradict the notion that all current information is factored into the market. Indeed, anyone wishing to trouble themselves to read Buffett's annual letter to his investors in Berkshire Hathaway will find an accessible, comprehensible theory of investing that doesn't once say how useful index funds (or any other kind of mutual funds, for that matter) are. In the limited world of 403(b) investing, I can see where index funds can and should play an important role. But for any investments outside of 403(b) or 401(k) accounts, I can't for the life of me understand why an educated investor would turn to mutual funds.