Firstly, perhaps have a background read about what market efficiency is academically considered. Note how there are different forms of it (from strong to weak form).

My personal view in the stock market (and the JSE), has always been that market efficiency is strongly positively correlated to liquidity of the stocks. In other words, the highly liquid, highly covered and well understood Top 40 (i.e. blue chips) on the JSE are mostly efficiently priced. Stepping down a notch, there is some inefficiency in the mid cap pricing. Finally, there are gaps of hugely inefficiently priced stocks in the small cap sector down to the pennystocks.

(This does disagree with another thought I have had around the 'Optimal Liquidity Theory'...)

The last point is probably why I have a bias towards hunting for value in the small cap sector and why I tend to find quite a bit there.

Now, with that background in mind, go and have a listen to where I chat to Simon Brown about market efficiency. Also, the graph that I refer to in the discussion is the below one where I have calculated the 12m rolling standard deviation of the weekly ALSI (J203) closing price as a percentage of itself (i.e. the volatility):

(Click to view enlarged graph in new window.)

Perhaps join Simon and my discussion and post a comment below here or tweet at us.. Do you think markets are getting more efficient or less?

Moving onto some stock specific news, Ububele (UBU) has been quite a disappointment since listing.

The Group operates at the pre-harvest stage with chemical and inputs into the farming process and then in the post-harvest stage with value-added food and fruit juice products. So, in other words, Ububele is in that sweet spot of agri-investments, but somehow it just isn't doing well?

I think the real reason behind Ububele's challenges lies in its acquisitive strategy (to the best of my workings, Ububele has been so acquisitive that it actually has a negative tangible NAV) and its size. The former has created a hodge-podge of companies that need to be properly integrated (easier said than done) and the latter means that Ububele is a price taker with little to no returns to scale.

The latest trading update is another disappointment where Ububele explains how "...headline earnings (loss) per share from all operations (including discontinued operations) is expected to be at least (4.94) cents per share compared to 1.27 cents per share for the year ended 30 June 2011 and attributable earnings (loss) per share from all operations (including discontinued operations) is expected to be at least (21.56) cents per share compared to 1.25 cents per share for the year ended 30 June 2011."

Ububele explains that one of the reasons for this coming loss is the discontinued operations. Basically, this is a non-explanation.

On the other hand, Calgro M3 (CGR) turned the corner a couple set of results ago and has been impressive ever since. The Group builds and sells units in integrated, mixed unit residential complexes.

The Group previously released a trading statement indicating that profits were expected to be greater than 50%.. This was very open-ended, but Calgro can only book revenue once the Deeds Office registered transfer of ownership, thus the Group needed to wait for the final day of the year end to see how many transfer were registered. That would dictate the revenues they could book, which would basically dictate their bottom line.

Hence, the Group has now released an updated and more detailed trading statement: HEPS is expected to be up between 80% to 90% for H1:13.

The CGR share jumped some 6% yesterday, but by my calculation it is still only trading on a 'worst case scenario' Price Earnings of 6.9x! Not just this, but the Group's project and sales pipeline remains extremely healthy.

Now, I am talking my book with Calgro as I hold it in my portfolio (Keith's Portfolio), but there is good reason why I hold it: not just do I think that Calgro is under-valued now, but the fact that it is doing so well in such a tough market implies that it could well be the 'next big thing' in a couple years time when the next boom happens.

My Calgro position is one where I am happy to watch CGR rise with its profits now, but I don't expect a major re-rating in its PE until there is a next major bull market. Then, not only will Calgro profits get carried up with an expanding economy, but the share will get a positive re-rating that only a euphoric bull market can provide.

And then I will cash out.

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