When facing the beast... keep calm and carry on

The recent share price volatility has rocked investors all around the world. The FTSE is now officially in correction mode, 11.5% down on just a couple of months ago with another terrifying plunge today. The viciousness of these price falls has led to huge trading volumes on exchanges as stop losses are hit and investors readjust their portfolios for seemingly escalating risk. At times like these shouldn't we just run for the exits?The beast on wall streetRegular readers will know that I'm a fan of the late Professor Robert Haugen's work. Robert Haugen was one of the great financial academics who railed against the idea of efficient markets. Sadly much of his work has gone underappreciated by his peers due to his tendency for polemic, though more recently the rise of low-volatility funds has seen his star re-emerge.One of the lesser known books he wrote was titled "Beast on Wall Street... how stock volatility devours our wealth". In it he illustrated with his custom panache how the prices of stocks are far more volatile than their underlying fundamentals can explain. What he found was that price volatility begets price volatility....