Benefiting from Irrational Investors — HBS Working Knowledge

Behavioral Finance—Benefiting from Irrational Investors — HBS Working Knowledge:Quoting Malcom Baker of Harvard: "'At the foundation of finance is the idea that investors and managers act rationally, so that capital market prices reflect fundamentals and managers respond to incentives in predictable ways,'...But investors don't act like computers in financial models. Behavioral finance replaces