One common objection to the idea that share prices are driven by irrational investors is that, over time, they should be driven out of the market as the smarter money profits at their expense. Very often, however, this claim is wrong as a new paper by Ulrike Malmendier at the University of California at Berkeley shows. She describes how markets sometimes actually select in favour of irrational buyers.
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Chris Dillow
Monopoly in question
Investors are betting that the US's giant firms will continue to grow strongly. This is a risky bet.
Chris Dillow