Over recent weeks, the recovery of equity markets has left many scratching their heads. In particular, some distressed companies, such as Hertz (NYSE: HTZ) and Chesapeake Energy Corp. (NYSE: CHK), have experienced monumental gains after releases of negative news. A recent piece out of the Wall Street Journal explores how the overconfidence of investors contributes…
Tag: Overconfidence Bias
Human Irrationality and Investment
As the battle between passive and active investing rages on and evidence continues to pile up to support the use of indexing strategies over picking stocks, investors continue to trade excessively in hopes of beating the market. Even worse, some pay exorbitant fees to managers that continually underperform. So, why do people continue to invest…