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1. Pricing Inefficiency - As the author points out, in the stock mkt, slides or ascents often gain a momentum of their own. But do consider the critical distinction that different buyers in these mkts can buy the same stock at different prices and make that decision based on whether they think it is value at premium, par or discount. So a stock that has an intrinsic value of say $10 may slide down to $8 but before soon someone smart realizes that it is under-priced and buys it out - for $8, NOT $10. This is illegal for the most part in the large corporations' labor market. If I receive two resumes identical in all aspects but unemployment - history ,WHY should I pick the one with higher unemployment, all else being equal? After all, they will both cost me the same in wages, won't they? It would be irrational to pick the riskier one just as it would be completely irrational to buy the riskier stock if it is not priced a cent below the safer option (assuming equal returns on both here)