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.

Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (11384)	9/3/2003 3:12:23 AM
From: Sam Citron	Read Replies (1) \| Respond to of 95617

The market does behave rationally and logically. It doesn't appear to sometimes because the rational logic is often based on ignorance and influenced by charlatans. The first sentence is only true in the long-run. In the short term market prices are set by emotional and fallible human beings with huge perceptual biases that regularly interfere with the always difficult task of valuing intangibles. It is not just ignorance and charlatans that get in the way of the perfect market that you envision. We are almost hard-wired to follow the crowd. If you are bearish while the market is bullish, for example, you risk getting run over by a freight train. So traders learn to detect and follow trends. They have no choice but to act the way that they think other traders are likely to act. This is not ignorance but Survival 101. Sure there are a few intrepid investors who have the brains to know what they are buying and the discipline to wait for the precise moment when the crowd is most eager to sell, but these same investors frequently underestimate the power and momentum of the mob. Others may possess neither intelligence nor discipline, but may simply have a nose for tipping points. Rational? Logical? Markets are often chaotic and erratic as they swing from one extreme to another. But the market is always right.<g>