Value investing · Course 38 of 39 · The practice
Why any of this can work
The case that mispricing should not exist, stated at full strength, then the arguments for why some survives, and what would have to be true for you to find it.
For a reader who has learned a method for finding mispriced securities and has never been made to argue with the position that says there are none to find. A method you cannot attack is a method you cannot defend.
After this course you can state the efficient market claim in the terms its authors use, explain why it is hard to test at all, state the paradox that a perfectly efficient market has nobody paid to keep it efficient, describe why a known mispricing can outlast the capital betting against it, name the mandate constraints that stop a professional owning certain positions, say whose clock is running in a professional's decisions, and list the structural advantages an individual has with the disadvantages named alongside them.
Nothing in this course says the market is easy to beat, and one of its sources is a letter telling most investors to buy an index fund instead. It assumes What the evidence actually shows and Where the method came from.
The method, not the running of it
Why any of this can work is 7 lessons on running the whole method on one company. Running it is the part that only happens against real filings, on a real date, and this course has none of yours. It also cannot tell you the day one of your reasons stops being true, which is the part that matters after you have bought.
See our methodology for how the product reads a filing and what it refuses to compute.