The metal palladium is not traded in high volumes. Is it therefore inefficient?
I know that small cap stocks or microcap stocks are often underanalyzed and therefore are mispriced quite frequently (i.e., they are inefficient). The volume for palladium is less than 2.5 million dollars a day, about the volume of an average stock on the NYSE with a capitalization of 200 million dollars. I know that any 200 million dollar stock is bound to be inefficient, and I looked around for in depth analysis of palladium, and I couldn’t find anything. Does this mean that the price of palladium will be inefficient? PLEASE ANSWER!!!
You make a great point in your theory. However, commodities are not like stocks and should not be traded/invested as stocks. They are a different breed of asset. Illiquid investments should not be made because it may be difficult to sell the position. Small cap stocks are extremely risky investments, as I assume you know.
Mark
