The Irrational Investor

The Irrational Investor concept highlights that investors don’t always make decisions based purely on logic or facts. Instead, their choices can be influenced by emotions, biases, or trends, leading to potentially suboptimal investment outcomes. This irrational behavior can cause market prices to deviate from true values, creating opportunities or risks. Recognizing this tendency helps in understanding market dynamics, as collective irrationality can drive bubbles or crashes, emphasizing the importance of discipline and psychology in investment strategies.