But to those who study the mind, they're answered by a look inward. Economists assume that the almighty buck is the great leveling tool. In other words, the dollar of dividend you earn from an investment in The Why Files, Inc., is worth the same as the buck you could earn delivering the paper-only version of the Files. This is despite the fact that you would have to brave sleet and snow to deliver the paper, but you can sit back and watch the dividends deposit themselves in your cash account. But the irrationality of the market extends far beyond that.
Investors buy dumb stocks.
They dump promising stocks. They hold onto losers long past the point of disaster. And they don't recognize a challenger that's going to rebound from the ropes and knock out the titleholder. With issues like these, The Why Files decided it was time for psychoanalysis. We called John Schott , a clinical instructor in psychiatry at Tufts and Harvard Medical Schools who also manages money at Steinberg Global Asset Management, Ltd .