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We examine (i) whether the business practices of Berkshire Hathaway investees are consistent with Warren Buffett's public statements on what constitutes good accounting, governance and investing practices and (ii) whether these practices are associated with Berkshire's initial “selection” or...
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Within the area of finance, most basic theoretical models do not fully describe true household investment decision-making behavior. This is due in large part to the fact that most traditional finance models are based on the assumptions that financial markets operate without frictions and that...
Persistent link: https://www.econbiz.de/10013057659
far above their fundamental values. Conversely, during bear markets, loss aversion, false reference points and anchoring …
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Understanding fundamental human tendencies can help financial planners and advisers recognize behaviors that may interfere with clients achieving their long-term goals. The authors describe several well-established behavioral biases and suggest how to overcome them
Persistent link: https://www.econbiz.de/10013024183
We show meetings of investors and firms convey information about expected returns. Investors frequently travel to meet in-person with firms before investing, and we show firms with abnormally frequent meetings predictably outperform firms with abnormally infrequent meetings by roughly 70-to-100...
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allocation. Loss aversion per se is a relevant variable in explaining financial risk-taking. …
Persistent link: https://www.econbiz.de/10012039641
The disposition effect occurs when investors hold unrealized loss assets for too long and sell unrealized profit assets …. Our findings suggest that investors have a risk-averse propensity for highly illiquid assets in unrealized loss areas and … occurs in unrealized capital loss, and the disposition effect is reversed …
Persistent link: https://www.econbiz.de/10014254682