"Mr. Market suffers from some rather incurable emotional problems; you see, he is very temperamental. When Mr. Market is overcome by boundless optimism or bottomless pessimism, he will quote you a price that seems to you a little short of silly. As an intelligent investor, you should not fall under Mr. Market's influence, but rather you should learn to take advantage of him." - Benjamin Graham
Stock Markets around the world kept plummeting the past few months, wiping away a large amount of investor wealth. However the month of October saw a smart recovery in the markets. During a time when an annual return of 10% is considered fantastic, the markets gained 10% just in the month of October! The rise in markets during October was largely due to perceptions that the Greek crisis would be contained, and perhaps even solved. As European politicians negotiated with one another, the stock markets continued to gain momentum.
However, there is a possibility that the deal reached the previous week will not be honored. There is also the possibility that the current government will not survive. The stock market expectation that this would be solved has clearly not materialized. So why are the markets not reflecting this? Is there something the stock markets know which others don't?