This is Trend Following Radio, where great thinking comes alive.

Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings.

I am your host, Michael Cobell.

Not filtered, raw, honest.

That's my passion.

Lassa Peterson is a finance professor at Copenhagen Business School and NYU Stern School of Business.

He is also a principal at AQR Capital Management.

His new book is titled Efficiently Inefficient.

That's what we break apart today.

I hope you enjoy this conversation.

Efficiently inefficient, the title of your new work from the last few months.

I think obviously you're breaking some, I guess you could say it's some new ground,

but obviously we've all seen in the last year,

two years where the Nobel Prize was split between Pharma and Schiller.

I'm guessing that there was a certain inspiration for your title from that. If not, tell me the inspiration.

Yeah, that's right.

So there's been this long academic debate about whether markets are efficient.

And Gene Farmer, he stands for this view that markets are fully efficient and prices reflect the fundamental value of securities versus prices are inefficient.

And Schiller, he sort of represents the opposite point of view that market prices are irrational.

They're driven by investor irrationality and investors push prices far away from their fundamental

values. I have a great respect for both Farmer and Schillow. I know them both well. But I wanted

to sort of take a different point of view, one that is somewhere in

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