Does Wisdom of Crowds apply to earnings estimates, price targets, value estimates and stock prices?
The behavioral tail can wag the statistical dog
herd
Cliff Asness, Wall Street sharks and market inefficiency
Markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.
Selling a big winner is a tricky decision
It got to a point a few weeks ago when AMAT’s price was some 60% above fair value. It struck me that the price reflected serious ‘irrational exuberance’.
Danny Kahneman type risk policies for investors
Investor psychology can cause a security to be priced just about anywhere in the short run, regardless of its fundamentals
What to make of recent market run up?
Rising prices are a narcotic that affect the reasoning power up and down the line
The best performance is produced by a person and not by a committee
Doing what everybody else is doing at the moment, and therefore what you have an almost irresistible urge to do, is often the wrong thing to do at all
A set of rules to develop a behavioral edge – Part 4
Herding. All stock market prices are both the cause and result of herding behavior amongst investors.
The search for a better guide to stock values
Can we improve on the accuracy of these estimates by obtaining estimates from, say, 22 leading investment banks and averaging them?
Scatter shot estimates of fair value
A group with a high anchor were prepared to pay three times as much for the same wine as a group with a low anchor
Thinking for ourselves
Heuristic – This alternative to careful reasoning may cause us to answer the question of what is the fair value of a stock by asking the question, what is the ‘market value’?
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