Inefficient Markets

Discussion in 'Psychology' started by mejensen1, Sep 16, 2006.

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


    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
  2. 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?
  3. Thanks for letting us know that.

    Are you going to comment on the book? :confused:
  4. 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...