Agreed that doing the same thing over and over again expecting different results is foolish (ceteris paribus). I don't think that's a good analogy to Kibaran though because the fundamentals (besides the graphite price) keep getting better (i.e. it's not ceteris paribus on balance in my opinion). And a post-financing world is very different to current conditions as discussed previously, comparing a pre-financing world with a post-financing world is not comparing apples with apples; it is not the same thing.
Agreed with Keynes that when the facts change you should change your mind; go where the evidence leads.
Agreed with some caveats that the market can stay "irrational" longer than you can remain solvent; although this kind of thinking whilst necessary, can be a trap if you're wrong. Also, it depends where you are on the agreeable spectrum in the Big 5 to determine how "vulnerable" you are to contrarian opinions; which are necessary for being a great investor but not sufficient.
Regarding market-efficiency, I think it depends which segment of the market you're looking at and which historical period (i.e. excluding bubbles/manias); personally I think that the ASX200 (and most global mid-large capitalization stocks) is/are broadly semi-strong efficient but that the lower tiers of the market are inefficient due largely to the differentiation between risk-averse and risk-neutral investors (less so in the USA as they have expanded coverage on all segments of the market), because lets face it, who could manage money in a risk-neutral manner for risk-averse investors and retain their funds when things don't go well!? Looking at liquid, large-capitalization stocks that receive institutional funds/coverage and professional analysis, I respect the market retaining cynicism looking for a mispriced-bet but I'm surprised I'm if I find one at the top end (and they tend to make movies about it when people do find them). I'd side with Buffett on being agnostic about the broader market but remain observant for a mispriced-bet. This ties in to your last point about being an investor as opposed to a trader; I've reached the same conclusion and never use leverage anymore so that volatility can't hurt my position.
Obviously where we diverge is in our short/medium term views. Thanks for sharing your perspectives mate, interesting as always.
KNL Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
