Been Quote by Kenneth Fisher
“Most investors give too much credence to the theory that prices are rational; they presume that a market collapse must have been justified by serious economic trouble.”
About This Quote
Source Book: The Intelligent Investor’s Guide, 2015
Investors overtrust rational price theory, assuming market crashes always have solid economic reasons
In simple terms: Investors assume rational prices and justified crashes
Question assumptions about market rationality
Themes
Mood
Type
When to use this quote
- investment strategy
- economic analysis
- risk assessment
Key Concepts
Questions to Reflect On
- Do you consider irrational factors?
- How to guard against overconfidence?
Markets can be irrational and driven by sentiment