Classical economics: All actors are rational and stocks are efficiently priced. Behavioral economics, per Nobelist Richard Thaler: Investors’ decisions are warped by emotion and ignorance and prices can get out of line.<br /><br />Count Erik M. Herzfeld, a money manager specializing in closed-end funds, in the Thaler camp. He aims to buy when fund shares trade at an irrationally low percentage of liquidating value and sell at a high percentage. Unlike mutual and exchange-traded funds, closed-ends don’t do redemptions, and their prices are a matter of investor whim. <br /><br />“Big discounts and big premiums. It’s behavioral,” Herzfeld says. “No one reads prospectuses.” Or rather, he reads and retail investors don’t.<br /><br />Read the full story on Forbes: https://www.forbes.com/sites/baldwin/2023/10/02/confessions-of-a-closed-end-fund-bargain-hunter/?sh=22f26a6c1111<br /><br />Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1<br /><br />Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:<br /><br />https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript<br /><br />Stay Connected<br />Forbes newsletters: https://newsletters.editorial.forbes.com<br />Forbes on Facebook: http://fb.com/forbes<br />Forbes Video on Twitter: http://www.twitter.com/forbes<br />Forbes Video on Instagram: http://instagram.com/forbes<br />More From Forbes: http://forbes.com<br /><br />Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
