BARRY J from TX posted over 1 year ago:

Tudor, thanks for the tip to read this study. I misread your review to think it was about MY PERSONAL (any individual investor’s) emotions that the authors studied. When I downloaded their article, it became clearer, and made more sense, that the authors were ATTEMPTING to study (and therefore create) "collective" emotions (Is that possible? Or is that an artifact of INFERRED from bestowing names on past EFFICIENT market behaviors?) of the "collective" (or merely aggregated and labeled?) actions of unorganized participants," not individual participants. (Thus, a "egg or chicken" issue?) Believe me, we AAIIers do NOT have any meetings outside the Michigan Ave clubhouse, and we hardly ever agree on anything that can be characterized as a "collective emotion." The authors were trying to CORRELATE the length of performance of historical long-short portfolios -- the preferred tools of the market anomalies / factors crowd (Fama and French et al) – size, value, quality, growth, and momentum, etc. -- to superior market alpha during recent market “runs.” Like most second/third tier “researchers,” they found and bagged the pink elephant they were tracking. The elephant rifle they used to bring down the “collective market emotions” beast was tables and tables and tables of “just so” data anchored in “fuzzy” definitions of “collective" and "emotions” (the proverbial elephants in the room) which they stuffed and mounted as a NEW “anomaly” in their trophy room then went over to South Beach for mas mojito. My take: they were trying to justify the existence of a phantom “emotional market premium” as the source of (current and past) market over-valuations rather than the simpler Occam's Razor, "efficient market" price movements. Interesting? As "they" say, “Yes, No.”

ROBERT A from NC posted over 1 year ago:

The author starts off well: "Investor emotions cause asset mispricing, which leads to temporary market inefficiencies." Warren Buffett has been saying that for decades. Unfortunately, the rest of the article is about as useful as a bagpipe on a deer hunt. I will take my friend Barry's word for the utility of the underlying study.