Peter,

Thank you for visiting our blog and for your comments. Though not a direct quote, I believe that the statement you reference is a fair characterization of Woolley's remarks and his criticism of the EMH, as originally presented in Fama's "The Behavior of Stock Market Prices" (1965). According to Woolley, the EMH does not account for the fact that investors often delegate to intermediaries with different incentives and levels of competence, which leads to mispricing and volatility. Fama thinks this variability in returns is perfectly rational, while Woolley and other behavioralists see it as irrational.