A butterfly flaps its wings in Bangkok, and my junior mining shares go up 11%

Always nice to see the efficient market theory put into action. Even when people get carried away for the wrong reasons, the market has a way of correcting itself.

Crystallex shareholders fell for a fairly obvious Internet prank yesterday, the Globe and Mail reports.

The company's stock has been volatile for the last year or so, due largely to the fact that the capricious regime of Hugo Chavez often sabre-rattled about not allowing them to proceed with the potentially lucrative Las Cristinas gold mine in Venezuela. Crystallex investors have been on a roller-coaster ride as a result.

Yesterday, an anonymous prankster posted a bogus news story (complete with Caracas placeline) that the company had been granted a key permit to proceed by the government.

The result? The stock surged as much as 10% in the early afternoon, before returning back to earth once the story was proved false. Savvy investors should have been tipped off by a key line near the end of the story: It said Venezuelan President Hugo Chavez was “leaning toward filling the mine with water and soaking his fat ass in it.”

They say in today's day and age, beating the stock market is incredibly difficult because the market reacts instantly to news based on the collective wisdom of individual investors. I'm not sure what a story like this says about the collective wisdom of the average investor. But I do know it's a good lesson in how vulnerable the stock market is to how fast information travels through capital markets.