Abstract
This book is concerned with stock market overreaction, i.e. the possibility that temporarily the valuation of stocks is out of line with fundamental valuation. Fundamental valuation means valuation based on discounted cash flows. The hypothesis of stock market overreaction is a major concern for private investors and portfolio managers alike. If they are able to identify temporary overreaction in the stock market, they will be able to earn an extra return. According to standard theory in finance that should not be possible.
Discovery commences with the awareness of anomaly, i.e., with the recognition that nature has somehow violated the paradigm — induced expectations that govern normal science. (Thomas Kuhn)14
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Kuhn (1970) pp. 52 f.
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© 2004 Springer-Verlag Berlin Heidelberg
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Külpmann, M. (2004). Scope of Analysis. In: Irrational Exuberance Reconsidered. Springer Finance. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-24765-4_2
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DOI: https://doi.org/10.1007/978-3-540-24765-4_2
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-05726-7
Online ISBN: 978-3-540-24765-4
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