All available information, according to proponents of efficient markets, is already factored into the price of a stock or other investment. According to proponents of efficient markets, the rise of algorithmic trading has made information processing in market prices virtually instantaneous.
Others, though, are still not persuaded. They contend that market inefficiencies are the reason why long-term investors like Warren Buffett or high-frequency traders can regularly make money. They contend that these inefficiencies are inevitable.
A behavioural model known as the Pompian behavioural model is used to categorise investors into four distinct behavioural investor types (BITs). Cognitive errors and emotional biases are two different types of behavioural biases.
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