Everything Not Zen: Finding Return Opportunities Amidst Renewed Market Volatility – Part II
Perceptions ANIKA HUIZINGA
A proper balance between bulls and bears, between risk aversion and risk seeking behavior, leads to something like market Zen. When all views are incorporated in such a way, market prices are pretty good estimates of fundamental value. In part I of this series (which you can find here), I wrote about Benjamin Graham’s personification of market behavior, Mr. Market, and how his volatile behavior creates opportunities for active investors.
To sum all of that up in one sentence: When Mr. Market loses his Zen, the active investor finds opportunity. In part II of this series, I will explore how mispricing works at the level of individual securities.