TLDR Markets are efficient over the very long term, but are inefficient in the short term owing to the inherent psychology of humans and the changing market structure. Additionally, the strong form of the efficient market argument fails to address common, but severe, mispricing events. Investors should instead endeavor to understand the securities they deal in, and attempt to discover and exploit mispricings where they exist. The readiness to exploit these mispricings when opportunities occur, however, hinges upon one’s knowledge. Hey everyone, hope you enjoyed last week’s post on risks and risk assessment. (If you have gone the extra mile to conduct a comprehensive risk assessment on yourself, well done! Be sure to check in from time to time since these risks are not stagnant.) Understanding risks and how we can get an accurate sense of them is the beginning of how we can organize our defenses a little. Today, however, I’d like to take a break from talking about risks and address an idea that...