Capital Market Myopia Harvard Case Solution & Analysis

Draws attention to a phenomenon that we call capital market myopia, a situation in which capital market participants to ignore the logical consequences of their individual investment decisions. Considered in isolation, every decision seems to make sense. When taken together, however, they are a recipe for disaster. Capital market myopia leads to excessive finance industry and unstable levels of evaluation in the stock market. Uses the hard drive industry to clarify the phenomenon. Argues that capital market participants should have seen the problems coming. They should have known that the assessment levels were absurd, largely based on the greater fool theory. The data needed to anticipate problems were readily available before industry began shaking and stock prices collapsed. Offer some simple lessons to help investors and entrepreneurs to avoid the charter membership in the club bigger fool. "Hide
by William A. Sahlman, Howard H. Stevenson 21 pages. Publication Date: August 12, 1987. Prod. #: 288005-PDF-ENG

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