Everybody handles change differently. Some embrace it, rolling with the punches. Many even seek change because they require new or additional stimuli. Others can’t cope with the slightest change, becoming anxious or frightened from non-life altering unexpected change, like flight cancellations.

Finance professionals must be equipped to cope with an ever-changing world. To assess whether changes are material and analyze any possible impact on markets or a security’s value. And to react to news (fake or otherwise), in order to determine whether to buy, sell or hold. Is an event temporary? Or perhaps, where there’s smoke is there fire? Has the market already discounted these changes or are investors in denial?

Often the market anticipates change. For companies, information from competitors, suppliers or customers may become apparent prior to a corporate report. So prices may have already reacted when news hits. Hence the adage, “Buy on the rumour, sell on the news.” Business schools have a more formal name for this—the Efficient Market Hypothesis, in its strongest form where all information is reflected in share prices at all times.

Because, periodically, events do come out of the blue, meaning they are completely unanticipated, we diversify. And, furthermore, we strive to find investments where the businesses are more predictable, to minimize the impact from exogenous factors.

As value investors, we do not believe the market is entirely efficient and we embrace change. First, because it’s the price fluctuations that provide the bargains we seek. Second, because we know changes are inevitable and we must be ready to react to the ebbs and flows of businesses, the business cycle, and newsflow.