[ZenoArrow]

How do you respond to the comments of stock market investors that suggest the market is frequently irrational?

[lmm]

The market is inherently volume-weighted, and there is much more "smart money" than "dumb money".

[ZenoArrow]

To give an example of something a smart investor would do, Warren Buffett supposedly only invests in industries he understands in depth:

http://www.investopedia.com/articles/05/012705.asp

What proportion of investors would you suggest show such restraint? Over half?

[lmm]

The proportion of "investors"? Low. The proportion of market capital allocation, among people doing active allocation for long-term buy and hold strategies? Very high.