Musing on the stupidity and greed of the herd mentality in financial markets
A summary of the strange disconnect between the stock market and real economy is today extremely obvious, after the Peak Oil proven a bluff and Unbeatable Pharama not exactly so, – Exon Mobil and Pfizer are not DOW 30 stocks anymore.
The mighty rally in stock indexes is very narrow and it is a classic demonstration of human stupidity greed and herd mentality.
Some of the more evident example I would mention are the prices on Apple, Amazon, Tesla and the unrealistic low yield on several CLO’s.
None of the above has any resemblance of any metrics promoted by academia economists – noting the fact that most economic theories are a fallacy that many people spending years on and in education and end up reading tea leaves to justify their economic theories, and their gain to fame if once in a while they happen to be right. They are mostly grown up “educated” honest people who do not realize they play in a sandbox, building sand towers.
The GOD’es of investor come and go and teams of economic theories abound only to be proving wrong with time after the "herd“ craze believes in something else, at the first signs of an onslaught of human greed stupidity and herd mentality.
It is like let say, a group of people staying their ground assuming that the heavy snow on the mountains peaks will never come down because it did not for their life time. Unfortunately for them event that all signs show the slowly development of an avalanche, they base their assumptions on past experiences that no avalanches happen during their lifetime, only to be proven wrong as an example due to the rise of temperatures and climate change.
After all this gibberish what I want to bring to your attention is a fact that we earthlings have nothing in our power to define our destiny, we can moderate it but that is about all.
To bring as an example is the recent discovery on oceans floor of a decaying 60Fe isotopes with a half-life of 2.6×10^6 y and therefore the assumption that the earth is passing through a dust cloud, of a by now dead remains of a supernova of a star which, presumably we entered about 33,000 years ago.
What I intend to say in this example that we have no idea if in the next few years of travel through the universe we will not hit something much more damaging that at the end will wipe out all humanity….. at that time, what help can we have from all of our fancy economic theories that work so nicely on a spreadsheet? IMHO about the same help when we worship an idol for better crop yield or anything else.
Bottom line - NOTHING |
