STOCK GOODIES PLAYS OF THE WEEK

[Black_NITE]

Irrational Exuberance Ties with Technical Analysis

Many of the theories put forth in this book fall in the realm of behavioral finance or behavioral economics. Behavioral finance is considered a branch of technical analysis. In fact, Irrational Exuberance was required reading for the Chartered Market Technician (CMT) exam on 2011. Behavioral finance is an attempt to understand the behavior of investors and institutions when investing in stocks, bonds, real estate, tulips or other securities. What prompts individuals to buy or sell a security? How do investors handle risk or loss? Why do speculative bubbles appear and then burst? Is there such thing as the dumb money and the smart money? Shiller sheds light on the investing process by highlighting the key factors that led to Irrational Exuberance in the late 1990's.