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"What causes prices to be wrong?"

Tuesday, October 28, 2008
It could be either a specific feature of investor psychology, or it could be some sort of institutional effect..

A SQUARE :: 28Oct08 "What causes prices to be wrong?"
Category Behaviour Finance Special
Author Sona Blessing
Sentiment risk is when you correctly identify a cheap stock, but it gets even cheaper. Sentiment risk is likely to cancel out in the long run, as prices eventually revert to fundamental value, but can be very damaging in the short run as sentiment will be correlated across stocks.
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