A pragmatic view on the financial theories

Chișu Mihai ()
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Chișu Mihai: The Bucharest University of Economic Studies, Faculty of International Business and Economics, Bucharest, Romania

Proceedings of the International Conference on Business Excellence, 2018, vol. 12, issue 1, 197-208

Abstract: This presentation reviews some real examples from a trading daily basis behavior proving the sentiment is one of the most important drivers when it comes to investment decision. During decades of studying and observing the financial markets we have seen different approaches in the light of many prestigious writers. Are we rational enough to be good candidates for Fama’s theory of Efficient Market Hypothesis? Is it true what John Maynard Keynes stated 90 years ago when he said „the market is subject to waves of optimistic and pessimistic sentiment”? Is the financial behavior the new trend in the financial markets? Are Daniel Kahneman (Nobel Prize winner 2002) and Amos Tversky the new challengers in the market theories league? Future research should concentrate on various symptoms of sentiment and what makes investors become prone to sentiment. This is an important issue to be debated since investors constantly have to analyze, process and interpret huge data of information which provides the basis for their actions.

Keywords: behavioral finance; capital markets; anomalies; bubbles; market sentiment; .financial theories; Romanian capital market; market volatility; market crush; BET-FI Index (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:poicbe:v:12:y:2018:i:1:p:197-208:n:19

DOI: 10.2478/picbe-2018-0019

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