Bubbles, crashes and the human condition
RedTiger
Posts: 5,608 ✭
http://www.theatlantic.com/doc/200812/financial-bubbles
link
Readers know I am a big fan of theory, and also a big proponent of psychology and markets. The Atlantic article delves into both and why irrational behavior occurs, over and over again, even with the same participants that should know better in a game where everyone has exactly the same precise information.
Greed and fear drive markets the world over. No matter what is being traded, markets are more alike than different. Add in a less than perfect informational exchange, mix in some smart money, and some dumb money and the theory would do well to simulate a real market.
link
Readers know I am a big fan of theory, and also a big proponent of psychology and markets. The Atlantic article delves into both and why irrational behavior occurs, over and over again, even with the same participants that should know better in a game where everyone has exactly the same precise information.
Greed and fear drive markets the world over. No matter what is being traded, markets are more alike than different. Add in a less than perfect informational exchange, mix in some smart money, and some dumb money and the theory would do well to simulate a real market.
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Comments
quote above from RedTiger's article link
reminds me of the 2006 ASE anniversary sets
and when the 08/07 ASE's were discovered....
to participate in are.......BLOWING SOAP BUBBLES.
Camelot
Liberty: Parent of Science & Industry
There are many aspects humans don't control, but human psychology is always the the final arbiter of price. Overtime, I have learned it's a lot easier to make better returns fading dumb money, than following it, it's just that the toughest part is figuring out who's the dumbest, you or the other side of the trade ;~
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
For the equity holders worried about Greek Monday
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>For the equity holders worried about Greek Monday >>
what a great video! look how young they are, and how small the audience! That film clip is older than I am.
No nervous breakdown, today at least.
Liberty: Parent of Science & Industry
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Herd mentality will always allow bubbles to form and to pop. >>
I wish we had a bubble every other year....great opportunity to make some money.
Knowledge is the enemy of fear
Which suggests to me we are not in a stock bubble.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>
<< <i>Herd mentality will always allow bubbles to form and to pop. >>
I wish we had a bubble every other year....great opportunity to make some money. >>
Agreed. Blood in the streets they say.
<< <i>Let's revisit this in 7 more years. >>
Better make it two.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey