The first assumption, laid out in Delong, Shleifer, Summers, and Waldmann (1990)，is that investors are subject to sentiment. Investorsen timent, defined broadly, is a belief about future cash flows and investment risks that is not justified by the facts at hand. The second assumption, emphasized by Shleifer and Vishny (1997), is that betting against sentimental investors is costly and risky. As a result,rational investors, or arbitrageurs as they are often called, are not as aggressive in forcing prices to fundamentals as the standard model would suggest. In the language of modern behavioral finance, there are limits to arbitrage. Recent stock market history has cooperated nicely, providing the Internet bubble and the ensuing Nasdaq and telecom crashes, and thus validating the two premises of behavioral finance. A period of extraordinary investor sentiment pushed the prices