Episode 29: Unpacking the Phenomenon of Meme Stocks and Investor Behavior
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In this episode of the Brtan Foltice Behavioral Finance Podcast, Dr. Brtan Foltice delves into the intriguing world of meme stocks, such as GameStop and AMC Entertainment, and their impact on investor behavior.
He introduces key concepts of behavioral finance including noise trader risk and the Greater Fool Theory, explaining how these factors drive the stock prices far beyond their fundamental value. Bryan demonstrates how meme stock phenomena bring to light irrational aspects of investor behavior, fueled by social media influences and group dynamics rather than financial fundamentals.
He also shares insights from his experiences teaching corporate finance, emphasizing the learning curve and sophistication investors gain through these market anomalies. The episode concludes with an encouragement for listeners to delve deeper into behavioral finance, suggesting it as an elective for finance majors and teasing an upcoming course package on the subject.
00:00 Introduction to Behavioral Finance and Meme Stocks
01:21 Summer Teaching and Transition to Online Classes
03:10 Diving Deep into Meme Stocks Phenomenon
07:38 Behavioral Finance Theories in Action: Noise Trader Risk and Greater Fool Theory
15:57 Learning from the Meme Stock Frenzy: A Shift in Investor Behavior
18:26 Wrapping Up
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