In Security Analysis, authors Graham and Dodd defined intrinsic value as the “value which is justified by the facts...the assets, earnings, dividends, definite prospects, as distinct, let us say, from market quotations established by artificial manipulation or distorted by psychological excesses.”
Similarly, while Mises did say that “human action is necessarily always rational,” he also acknowledged that in an artificially low interest rate environment, when the natural rate of interest has been manipulated by central banks, consumers and entrepreneurs are more likely to coordinate their actions with others.
This translates over to the stock market directly. As we’ve seen with the FANG stocks, some trades get much more crowded than others, creating market inefficiency.
It is up to the value investor to think very differently than the general investing populace, and look for opportunities where securities whose intrinsic value has not changed, but their prices have become depressed.
Being a value investor requires some patience, some diligence, and some unconventional thought. I find that limiting myself to one industry, one market cap, and even one market is counterproductive to finding opportunities where value may lurk. Widening the horizons should not solely be confined to time.
One of the most rational statements I've heard is that "there's always a bear market somewhere." The job of the value investor is to find where.