Cliff Asness: belief

Transcript context

…This is my intuition. You look at these other areas. People at work, they’re given positive or negative feedback. They may overreact more readily than underreact. Let me take this another way. I think we are mixing overconfidence with overreaction a little bit. New news, people might be overconfident in how much they understand it, but they don’t seem to incorporate it enough. There is evidence on this outside of just returns to momentum. People look at the actual news that came out, try to gauge what the reaction should be, things like that. I do think there are things when it comes to processing new information, I do think there is an underreaction in that sense, an anchoring and adjustment. People do all kinds of psychological experiments. You show people a whole lot of numbers and you show them numbers out here. They should move X, they move half-X. Yes.…

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