Quadrant three is the tactical allocation quadrant. Investors in this quadrant believe that, even though individual securities are priced efficiently, they (and only they) can see broad mispricing in entire market sectors--the same market sectors that are composed of efficiently priced individual securities. They think they can add value by buying when a market sector is undervalued and waiting to sell until other investors realize their mistake and return the market sector to its fair value. No prudent investors are found in this quadrant.