The chart below is an illustration of the transaction I was talking about in Episode 50 of the podcast. You had a situation where European airline stocks got hammered after an outbreak of Ebola in North-West Africa. The market panicked and began to price in the spread of the virus to Europe. With extreme media coverage, this was given a great probability than what was realistic. I had first-hand experience of this when holidaying in Malta (between Europe and Africa) where the planes were full in both directions and where even the pilots of the easyJet flights were buying stock.
easyJet and other airline stocks soon recovered.