The size and value effects have been studied by financial economists for years. As indicated above, researchers who first discovered the effects considered them inefficiencies. One explanation is offered by behavioral finance economists. Investors overemphasize their own skill, especially when it comes to their ability to predict the future earnings growth of individual companies. Behavioral explanations appear particularly appealing in helping us understand the extraordinary bubble in large capitalization high-technology growth stocks during 1999 and early 2000 and the suboptimal behavior of the investors who held them. .
