I use the word arbitrage because we're not talking about different markets in different geographies. We're talking about different markets that exist in different people's minds. If I can fundamentally understand, and believe in, a market more clearly than any other investors then my equation can change in ways that give me an advantage.

But the very factor that causes market inefficiency -correlated beliefs -makes exploiting that inefficiency difficult. The desire to be part of the crowd is pow erful, and being apart from the crowd is scary for most

Taking advantage of people who need to buy or sell for non -fundamental reasons