FYI: Investor sentiment—the propensity of individuals to trade on noise and emotions rather than facts—represents investors’ beliefs about future cash flows that the prevailing fundamentals cannot explain. Such activity can lead to mispricing. Eventually, any mispricing would be expected to be corrected when the fundamentals are revealed, making investor sentiment a contrarian predictor of stock market returns.
Regards,
Ted
http://www.etf.com/sections/index-investor-corner/swedroe-ignore-investor-noise?nopaging=1
