The market can stay irrational longer than you can stay solvent, attributed, probably incorrectly, to John Maynard Keynes
is the old adage attributed, probably incorrectly, to the famed economist John Maynard Keynes
While he doesn’t say the market is in a bubble — a noun he seldom uses — Asness says pretty much any measure finds the valuation ratio of expensive stocks to cheap stocks is historically high.
He gives three reasons why markets are less rational.
Two factors, he says, probably have a small influence — the rise of index investing and the long duration of low interest rates.
But the biggest reason for a less efficient stock market, he says, is social media and related advances in technology.
“I’m far more certain that social media, the overconfidence that come when people think all the world’s data is at their fingertips, and gamified, fake-free, instant, 24/7 trading has done so in a significant way,” he says.
MarketWatch 3 september 2024
Kommentarer