Investing in a value stock attempts to capitalize
on inefficiencies in the market as the price of the underlying equity may not match the company's performance.
This fragmentation was accompanied and encouraged by the rise of high - frequency trading, a term that describes the use of high - powered computer programs to make hundreds or thousands of trades per minute in an attempt to exploit
miniscule inefficiencies in the markets.
Securities exchanges, for example, necessarily require deep computerization and strong data networking, and new software and hardware products and services are created every day intending to chase down and
eliminate inefficiencies in these markets.
«I think one of
the inefficiencies in the market is investors are generically too short - term oriented and time arbitrage is one of the best inefficiencies in the market» David Einhorn
«The investment strategy involves identifying instances where the capital markets have mispriced investment opportunities and exploiting price discrepancies and
inefficiencies in the market,» the filing said.
After identifying
the inefficiencies in the market, they began to collect all of the relevant data driving these volatile movements.
If that happened, there would be
inefficiencies in the market and active managers would be able to swoop in and make big profits on mispriced securities.
It also requires acute and constant attention to detail in order to identify a small mispricing or
inefficiency in the market that could result in returns.
Value investors believe there are
inefficiencies in the market.