Understanding that rational decision-making is hard for human beings.There is just no way of eliminating all human biases in decision-making!Consider the stock prices and the impact of headline news.

A law suit is brought against a company that turns into headline news.Fearing adverse results, investors holding the company's stock rush to sell its stock, bringing down the company's stock price.If investors fear that other companies in the same industry can also be subject to similar law suits, they then rush to dump the stocks of the other companies as well.This rush to judgement without knowing the merits of the law suit or evaluating the nature of the likely judgement against the company is often attributed to non-rational behavior biases.Similarly, the speculative rush and bust of equity prices, as in "the dot com" period during 1995 - 2004 also inform us of human behavioral biases.

• What do these experiences tell us about the efficiency of markets when biases are repeatedly exhibited by market participants?
• Can you apply your learning on anchoring, over confidence, herd behavior etc. to market runs and turns?
• Can you analyze some specific examples?