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Ah yes, ABCT. First, assume the market is made up of rational actors. Second, assume that sustained irrational investment choices have been made by the rationa

Ah yes, ABCT. First, assume the market is made up of rational actors. Second, assume that sustained irrational investment choices have been made by the rational actors.

runeks 7y ago
A rational person can make mistakes.
anthony_r 7y ago
What is "rational". I don't think that this theory assumes anything about "rationality". It's many of the other economic theories that are built on the pinnacle of "rationality".
- Marazan 7y ago
  I mean, the fact that ABCT is not backed up historical events either is a bit of a blow to its credibility.
  - anthony_r 7y ago
    Have you ever seen the chart of fed funds rate with shaded recessions? https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS