Private equity firms make their living finding assets the market has mispriced. Every once in a while a deal comes along that shows the rest of us how those opportunities sit right there in the open.

EasyJet spent time trading below its book value before a £5.7 billion takeover battle broke out, with Apollo's bid currently set to take the prize after Castlelake backed away. Think about what that means for a moment. The market valued the entire company at less than the accounting value of what it owns. The planes, the landing slots, the cash on the balance sheet, all of it added up to more than the stock price said it was worth.

When private equity comes knocking on a door like that the math is straightforward. You buy the company for less than the sum of its parts, break it up or fix it, and pocket the difference. It is not complicated. It is just patient.

Now, I am not suggesting you start hunting for airlines trading below book value. The airline business eats capital for breakfast and has historically been a brutal place to generate returns. The fact that a bidding war erupted over easyJet does not change that reality for the industry as a whole.

But the broader lesson here matters for anyone building a portfolio over decades. Markets get pricing wrong. Sometimes they are too optimistic, paying nosebleed multiples for companies whose growth may not justify the price. Sometimes they are too pessimistic, marking down a profitable airline to less than the value of its assets. The pendulum swings in both directions and it rarely stops in the middle for long.

This is exactly why I keep boring on about index funds and diversification. When you own the whole market, you own the mispriced assets along with the overpriced ones. You capture the recovery when a beaten-down name gets bid back up by a buyout firm. You do not have to find it yourself, which is good, because most of us will not.

The easyJet situation also raises a question worth asking yourself. When was the last time you looked at what you actually own? Not the ticker, not the share price, but the underlying book value, the assets, the margin of safety. Most people never check. That is fine if you own a broad index fund. It is dangerous if you are picking individual stocks.

Private equity firms employ teams of analysts to dig through balance sheets looking for exactly this kind of gap. You and I do not have that advantage. What we do have is time, and the willingness to let compounding do its work without chasing the next hot thing.

So when a £5.7 billion deal shows that value hides in unglamorous places, the right response is not to go airline shopping. It is to make sure your portfolio captures the upside when the market eventually corrects its mistakes. Because it always does.

As always, I am sharing perspective here, not professional financial advice. Talk to someone who knows your situation before you make big moves.