Monday, June 21, 2010

Simple initial causes that led to dramatic effects

The Myth of the Rational Market
Justin Fox

Are you in search of a market-beating path?

Behavioural finance is more than just a collection of curiosities, or a self-cancelling mix of over-reaction and under-reaction, writes Justin Fox in The Myth of the Rational Market: A history of risk, reward, and delusion on Wall Street. He finds that the most consistent trait identified in behavioural research is overconfidence, which leads investors to think they know more about a stock's value than they actually do.


No comments: