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[sharechat] Irrational Exuberance

From:	"Steve Moxham" <stevemox@e3.net.nz>
Date:	Sun, 5 Nov 2000 11:47:14 +1300

An excerpt from an article in this morning's SST from a book by Robert Shiller, "Irrational Exuberance".

"Small investors don't realise they determine the level of the market. Many think "smart money" institutional investors who dominate the market have sophisticated models and superior knowledge to understand prices. Little do they know that most institutional investors are, by and large, equally clueless about the level of the market. Price levels were determined by a self fulfilling prophecy..."

..."So much for efficient market theory. What is to go in its place? An attention to psychology, sociology and history, said Shiller". - This is what I think is the benefit of technical analysis and charting...the ability to spot and predict patterns of investor behaviour.

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