It is also said that if you are right in the long run but it takes too long, it is indistinguishable from being wrong.
To add to this, there are always exceptions to the rule. If the rule is that the market is indeed a finely tuned weighing machine in the long run, there will always be exceptions to the rule.
Moreover, there is no time scale provided. Some consider 5 years long term, some a decade.
So from a conceptual perspective, while it is clear that the market doesn't always converge on intrinsic value due to logically there always being exceptions to the rule, what principles do investors have to distinguish what is an exception to the rule and what isn't?
This is difficult as something might appear to be an exception but may not be, or vice-versa.
Thoughts/comments?
Submitted July 09, 2021 at 10:22AM by Imboni https://ift.tt/2TNAzYC
