{"id":41555,"date":"2018-01-04T04:00:12","date_gmt":"2018-01-04T09:00:12","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=41555"},"modified":"2018-01-03T09:42:39","modified_gmt":"2018-01-03T14:42:39","slug":"who-is-more-rational-you-or-the-market","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2018\/01\/04\/who-is-more-rational-you-or-the-market\/","title":{"rendered":"Who Is More Rational? You or the Market?"},"content":{"rendered":"<p align=\"center\"><iframe loading=\"lazy\" width=\"853\" height=\"480\" src=\"https:\/\/www.youtube.com\/embed\/L81sxAFUqdg\" frameborder=\"0\" gesture=\"media\" allow=\"encrypted-media\" allowfullscreen><\/iframe><\/p>\n<blockquote><p><strong>Marginal Revolution University<\/strong><br \/>\n<strong>Published on 6 Sep 2016<\/strong><\/p>\n<p>We mentioned before that it\u2019s hard to beat the market. And you shouldn\u2019t try. But what about market anomalies? <\/p>\n<p>One anomaly is the Momentum Effect \u2014 where past stock performance predicts future performance, at least a bit. As an example, portfolios with past winners tend to outperform the market in the medium term. Why is that? The market sometimes under-responds to changes in information. Thus, some stocks can lag, even if rationally, they shouldn\u2019t. This is why picking past winners can generate some profit, though the profit\u2019s usually small.<\/p>\n<p>There are also other anomalies, like the Monday Effect, where stocks fall more on Mondays. Or, there\u2019s the January Effect, which says that stocks surge higher in that month. There\u2019s been some evidence for these effects, but these anomalies don\u2019t last. <\/p>\n<p>Despite its flaws, the market is still more rational than you. Don\u2019t forget, you\u2019re probably like most individual traders. You may become overconfident. You may not calculate probabilities that well. And if the market crashes, you\u2019re likely to act more emotionally than you should \u2014 just like everyone else. <\/p>\n<p>But don\u2019t just take our word for it \u2014 even Warren Buffett agrees! Don\u2019t try to beat the market. <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Marginal Revolution University Published on 6 Sep 2016 We mentioned before that it\u2019s hard to beat the market. And you shouldn\u2019t try. But what about market anomalies? One anomaly is the Momentum Effect \u2014 where past stock performance predicts future performance, at least a bit. As an example, portfolios with past winners tend to outperform [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[831,25],"tags":[571,1093],"class_list":["post-41555","post","type-post","status-publish","format-standard","hentry","category-business","category-economics","tag-investment","tag-macroeconomics"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-aOf","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/41555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=41555"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/41555\/revisions"}],"predecessor-version":[{"id":41556,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/41555\/revisions\/41556"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=41555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=41555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=41555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}