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" "Behaviorists tell us that we tend to overweight and overreact to the most recently received information. If we do, we will find that the information that we thought was so important becomes tempered, and reduced in significance, by new and related information that follows.
Robert (Bob) Arthur Haugen (June 26, 1942 – January 6, 2013) was a renowned professor of theoretical finance. He is currently retired from academics and is the president of Haugen Custom Financial Systems.
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The New Finance focused on the market's major systematic mistake. In failing to appreciate the strength of competitive forces in a market economy, it over estimates the length of the short run. In doing so, it overreacts to records of success and failure for individual companies, driving the prices of successful firms too high and their unsuccessful counterparts too low.