Classical economics: All actors are rational. Stocks are efficiently priced.

Behavioral economics, per Nobelist Richard Thaler: Investors’ decisions are warped by emotion and ignorance. Prices can get out of line.

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.

📷 Mary Beth Koeth
💪🏽 Jose Arizmendi & Johnny Beltran
Photography Direction Robyn Selman