This suggests that even professionals were not aware of the bubble that had formed.3 In another study, stock market professionals and laypeople provided forecasts for the prices of various stocks and estimated the size of their own and the other group’s errors in doing so. Both groups expected the professionals’ forecasting errors to be smaller than those of the laymen.
In fact, however, the errors of both groups in predicting stock prices were roughly the same. In a subsequent set-up, both groups were asked to pick the best-performing stock from two options. Here, both the professionals and the laymen proved to be overconfident with regard to their ability to pick the best-performing stock.