The Inefficient Stock Market: What Pays Off and Why

Business schools teach students that markets are efficient. They base this theory on the assumption that buyers and sellers are informed and rational. This book challenges this theory providing evidence that the traditional wisdom is false. All money managers, students, and teachers should read this book. Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

This book is not: 1. A thorough critique of CAPM and APT 2. Long 3. A good explanation of why certain inefficiencies exist in the market That being said, the book is a good essay on how to look for and find various factors that lead towards market outperformance. Haugen uses regression models and some common-sense statistical reasoning to choose which factors are actually useful.

A must read if you want to understand what makes stocks prices move. A technical book but written in a very accessible and easy to read style.

The Inefficient Stock Market is a nice slap in the face to Modern Finance. Getting my MBA, i was always turned off by Portfolio Management Theory because of the unrealistic assumptions made on the onset (such as everyone being rational and everyone holding an efficient market portfolio). Mr. Haugen provides a great analysis and statistical evidence to show that many of those critical assumptions are in fact wrong.He also provides an investment strategy of sorts that outperforms the S & P 500. All hedge fund managers should read this book.

Ever since I finished my MBA in 1985, I have suspected that the stock market is volatile and inefficient. I have studied Markowitz, the CAPM, and other elegant mathemetical models of the market that indicate the market (ex. S & P 500) cannot be beaten. This book claims it can and I believe Haugen is really on to something big.I have been a non-financial scientific and technical analyst for a company doing business primarily with the defense department for over twenty years and found the analysis techniques presented in the book to be completely rational and apparently based on a very sound statistical approach.This is the most refreshing approach to reality investing I have yet read. I intend to read the other two books in the trilogy.If you want to break out of the Modern Portfolio Theory mold, read it.