So said J.P. Morgan one day when he was asked for a prediction about the stock market. The cagey banker gave us the only market forecast that’s always right. Prices bounce around a lot. They always do. Sometimes they bounce higher (or fall lower) than usual. When that happens, cries of market inefficiency and irrational investors take flight. The alternative view is that markets are simply repricing assets based on new expectations for risk and return. What’s the evidence that rational pricing prevails? One clue is that the underlying fundamentals of the market change in line with prices.