Noisy market hypothesis
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momentum traders, as well as by insiders and institutions that often buy and sell stocks for reasons unrelated to fundamental value, such as for diversification, liquidity and taxes. These temporary shocks referred to as "noise" can obscure the true value of securities and may result in mispricing of these securities, potentially for many years.[1][2]
References
- ISBN 0078034698
- Wall Street Journal, Jeremy Siegel, June 14, 2006
See also
- Adaptive market hypothesis
- Agent-based computational economics
- Financial economics § Challenges and criticism
- Information cascade
- Noise trader
- Random walk hypothesis § A non-random walk hypothesis
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