Why I follow behavioral finance?

I have been following behavior finance for years. It has been an exciting area of finance but also has not always lived up to the hype of being able to identify ways of processing data to find Studying the mistakes that investors may make with decision-making has been helpful, but at the same time much of the behavior finance literature has not had a big impact on exploiting anomalies. Market anomalies exist but they are not frequent and do not always last. More importantly, they may be multiple behavioral explanations for anomalies that may seem inconsistent. I have not found ways to exploit the behavioral finance theories for money-making other than to accept that irrationality exists and can effect markets. So why spend so much time studying the behavior of markets. It is similar to why so much time is spent studying abnormal behavior in psychology. By studying the extremes or abnormalities in behavior we can better understand normal decision-making.

I have to go back to philosophy and the comments of Baruch Spinoza in Tractatus Politicus on studying subjects for the best reason for focusing on behavioral finance, “I have labored carefully not to mock, lament, or denounce human actions, but to understand them.” Study of behavior finance is useful not because we are going to find a rich new method for generating profits but because it provides a framework for observing and accepting the markets not for what they should be but for what they are.