The nobel prize in economics was awarded last month and while it's inherently an academic issue, it also has concrete applications outside the ivory tower. The work of two of the three co-recipients appears to be at odds: Eugene Fama's research that underpins the concept of efficient markets and Robert Shiller's research that suggests markets can be inefficient. While you probably don't sit around and talk about prize-winning theories with your clients, these ideas point to habits you should recognize in their behavior.

Fama, a professor at the University of Chicago, was undoubtedly right in his assertions that you can't beat the market. Vanguard's John Bogle made his name on this idea — it's the reason that low-cost index funds and ETFs are the way to go for most mass-affluent investors. But Shiller, a professor at Yale, was also right in his assertion that prices can get out of whack. (The third co-recipient was Lars Peter Hansen, also of the University of Chicago, whose work was more technical but still on the same concept of asset prices.)

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