Answers

1. Efficient market means that the current market prices of all securities already reflect public available information. Give you an example, there are 2 economists walk down the Wall Street, one of them saw a $20 bill on the street, he wants to pick it up; the other said that you waste your effort, the $20 bill is fake. Had it been real, it's already been picked up.

2. Current US secutities market is close to efficient market, means no one can beat the market consistently, Bill Gross and Peter Lynch are close, but they all fell apart at later of their investment career

You would rather buy index fund if you believe in efficient market theory, the theory is apealing and mostly it is true. The landlord here may not agree, they beat the market all the time I guess.