"Irrational Exuberance Reconsidered" is a comprehensive analysis of the dynamics of the stock market that addresses the question of whether markets overreact. In light of recent turbulence in the capital markets, it examines the discrepancy between rational investor behavior and the principles of behavioral finance. This revised edition combines theoretical approaches and empirical analyses, integrating feedback from securities analysts to foster a deeper understanding of the forces driving performance in the stock markets. The book offers a complementary perspective to Robert Shiller's original analysis of the US stock market in 2000 by focusing on the cross-sectional analysis of stock returns, thus making a valuable contribution to the ongoing debate about the predictability of stock returns.