Inefficient Markets

[mejensen1]

I just got the above book at the library. It is about Behavioral Finance, by a Harvard prof.

Book

Inefficient Markets: An Introduction to Behavioral Finance

by Andrei Shleifer (Author)

Paperback: 224 pages
Publisher: Oxford University Press, USA (April 20, 2000)
Language: English
ISBN: 0198292279

 

[Hook N. Sinker]

I recall some people writing that securities and stock market indicies are efficiently priced. Does the author have any evidence to challenge the efficient pricing model?

 

[jaronimo]

Quote from mejensen1:

I just got the above book at the library. It is about Behavioral Finance, by a Harvard prof.

Book

Inefficient Markets: An Introduction to Behavioral Finance

by Andrei Shleifer (Author)

Paperback: 224 pages
Publisher: Oxford University Press, USA (April 20, 2000)
Language: English
ISBN: 0198292279

Thanks for letting us know that.

Are you going to comment on the book?

 

[SteveD]

If the market was efficiently priced why do stock prices MOVE??? Why is there price swings, both up and down every hour??

NEWS moves the stock price:

Co upgrades/downgrades their earning projections

CFO is fired/resigns suddenly

Sector shows weakness/strength

Brokers upgrade/downgrade stocks/sectors/markets

What is a "shorting opportunity" to a trader is a "buying opportunity" to an investor...

And, everyone has a different opinion and takes action accordingly to that opinion...

Historically the thinking was that all the "news" was already factored into the price of the stock: efficiently

Now, the internet has made that news available to all and at a very quick pace...also there is an enormous amount of news daily....

Take a look at DELL, CSCO, INTC etc...they probably have 12/15 news items on Yahoo Fiance every day just about that particular stock...

SteveD