Valuation rule-of-thumb questioned as investors 'forget the scientific method'

A behavioural study published on 31 October indicates that many investors continue to rely on long-standing heuristics and 'rules of thumb' instead of rigorous analysis, despite data showing a 90 % confidence that these heuristics underperform. The report suggests that the recent speculative rally in equities may be partly driven by simplified mental models rather than disciplined evaluation of risk and return. Market-watchers caution that such behavioural gaps could amplify drawdowns if sentiment shifts abruptly.