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Investors have too often extrapolated from recent experience. In the 1950s, who but the most rampant optimist would have dreamt that over the next fifty years the real return on equities would be 9% per year? Yet this is what happened in the U.S. stock market. The optimists triumphed. However,...
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our measure of music sentiment captures seasonal mood swings. We further document that music sentiment is associated with …
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-specify certain mood-affecting events nor assume the extent of their impact on investors. We validate our music-based sentiment … find that music sentiment is positively correlated with same-week equity market returns and negatively correlated with next … when trading restrictions limit arbitrage. Music sentiment also predicts increases in net mutual fund flows, and absolute …
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The fact that human economic behaviour has a significant irrational element - one that is simultaneously hard-to-explain and highly predictable - has fascinated economists for decades from Fechner, 1860 to Shiller, 2005 and beyond. In this dissertation, I investigate the field from various...
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