There is always a lot of volatility in the market. Many people are seeing it as a gambling table (me included) but we have to keep faith that markets are in fact efficient.

Equities such as Bitcoin, Tesla, and many other recent trends make you scratch your head with disbelief.

If we believe that a stock will go up, there has to be some kind of rationale behind it. The story has to make sense.

Let’s say that you believe that a stock is undervalued. Would you buy it? You would only buy it if you believe that markets are efficient and one day the stock price will rise to reflect its true value.

Let’s say that you like a growth stock. You have to believe that the company’s earnings will grow one day to reflect the value of that stock.

In order for us to continue playing in the market, we have to believe in their eventual efficiency.

Sure, from time to time equities are mispriced, but only if we believe that eventually it will be priced accordingly, we would buy it.

If you don’t believe in efficient-markets, then there is no sense playing in it. Markets could be as random as playing the lottery.

When you see something such as Bitcoin going up for no fundamental reason at all, and prices continue going up, and all your friends are getting in, you have an internal battle of your reason and everything that you have learned versus FOMO (fear of missing out).

My final thought is that in history, we have seen many instances of market irrationality.

• The Dutch Tulip Bubble
• The South Sea Bubble
• The Japan’s Real Estate and Stock Market Bubble
• The Dotcom Bubble and
• The U.S. Housing Bubble

We have seen it all before and every time, markets have returned to their more realistic value.

Oftentimes, our faith gets shaken, no matter what we believe in, but we have to rediscover a way to solidify our faith and continue operating in a way that is congruent with our understanding and beliefs.