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
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?
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