Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: E. Charters who wrote (86083)	5/30/2002 9:01:38 AM
From: Cage Rattler	Read Replies (1) \| Respond to of 116895

Certainly, the probability of individual injury in a terrorist attack appears minimal; but, I'm not sure that's the point. 9/11 touched a lot of folks big time. If we consider the impact of 9/11 on the market, let’s recognize the serious financial impact upon investors who were gleefully "hang-ten" on the wave of a bubble. What they learn will not be associated with a reckless tulip-type investing style; rather, money loss should link to terrorism (sHr). This money loss/gain serves as reinforcement to habit formation – and can be either negative (loss) or positive (gain) depending upon your market position. Continuing the behavioral line of thought, subsequent terrorist attacks should have two effects. First, as negative reinforcement they should strengthen a market avoidance response for the average surfing Bull. Second, as positive reinforcement to Bears, it should encourage continued short selling. Both behaviors would increase probability of a down market. Either way you slice it, the result should be a longer and lengthier downturns -- from a behavioral perspective at least. Remember negative reinforcement establishes a habit pattern that is far more difficult to extinguish that a habit established by positive reinforcement. Therefore, linked to this should be a significant reduction in equity market participation. I would think a wise investor might shift from the techs to gold, possibly long bonds, and/or currency exchange. While the average small investor will store his remaining funds under his mattress, not in the market. Ted