I accept Michael Storm’s point that markets will never be 100% efficient, certainly not in a world where information is costly and often obscure rather than free and universally available to all as in the theoretical world of neo-classical economics. Indeed, it is the relentless search for alpha that makes markets as efficient as they are. That said, the question is whether there is enough alpha to provide all the burgeoning flow of investments into hedge funds with the type of returns that many naively expect. The best and savviest hedge funds can continue to deliver healthy returns simultaneous with a decline in the average hedge fund return and an increase in the number of blow-ups. My concern is that a considerable share of the money flowing into hedge funds is doing so based on past performance and some vague unstated fear of missing the boat. As Milton Friedman taught us, there ain’t no such thing as a free lunch.