Thursday, December 17, 2009

U.S. Treasury Runs Into Theories on Irrational Investing - Real Time Economics - WSJ

Say you have two traders. One buys a stock when it’s at $90 per share and another buys it when it’s at $110. If today the stock is at $100 per share, the person who bought at $90 is much more willing to sell than the person who bought at $110.

Mr. Kahneman’s insight helped to make a broader point –- individuals often act in emotional or irrational ways, counter to the view that individuals act purely out of self-interest. He won a Nobel prize in economics for the insight.

I didn't know they had a Nobel prize for common sense. But that beats the ones they've been giving out lately for nonsense.

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