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.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (61042)	3/15/2005 11:24:12 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

<explain to me how and why the financial markets are not going to act in the same way. The prices on things reflect up to the minute all the smart people crunching their numbers based on all the information available (on the up and up and on insider information).> Then there won't be an opportunity to make money. But when all the knowledge is built in the prices, cunning people create desinformation, smoke screens, instigate panic and fear so that people react ain a manner that distort prices. They either sell below the price what they have or buy at a higher prices based prompt by the misinformation campaign.

To: Mary Cluney who wrote (61042)	3/15/2005 7:03:42 PM
From: TobagoJack	Respond to of 74559

<<konw ... know ... know>> I dunno ;0)

To: Mary Cluney who wrote (61042)	3/15/2005 7:57:23 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

Mary, the main point is, as you say, that all the information is in the market, but the broad idea of people is usually wrong. They find out later what was true. Jay says such and such is inevitable. He must have his tongue in his cheek. He knows it is not inevitable that Taiwan comes under the rule of Hu Jintao and knows it is not inevitable that the Great Financial Collapse of 2001 might not happen [it hasn't happened yet, 4 years on and people have given up waiting]. Nor did the Great Depression of 1990 happen [Ravi Batra]. ideas.repec.org The mere fact of so many people expecting the collapse prevents it happening, in paradoxical irony. If they didn't believe it would happen, it would happen. Because they believe it will happen, it won't. It's a lot of fun in the markets. Mqurice

To: Mary Cluney who wrote (61042)	3/16/2005 1:48:08 AM
From: croesus1111	Read Replies (3) \| Respond to of 74559

"The prices on things reflect up to the minute all the smart people crunching their numbers based on all the information available (on the up and up and on insider information)." "All the little investors along with all the big hedge fund operators are feeding into their heads or supercomputers, every bit of information available. If there is a bargain somewhere, the hedge funds are going to buy it up - even for fractions of percentages." You are basically stating the "perfect market" hypothesis. You, and that hypothesis, are right to the extent that prices are based on information. But different people come to different conclusions about the future based on the same available information. Part of that is based on assumptions that people start with. A related part is based on their beliefs about how the world works. People's market decisions are a product not only of information, but of assumptions, beliefs, and feelings (such as greed and fear). One might be able to group people into different factions that will probably act in particular ways given certain information. The factions are not symmetrical. There are usually a great deal more people in the markets that believe that the status quo will continue more or less unchanged in the near and distant future. Eventually, almost by definition, that majority will be wrong. That error represents a great opportunity for other factions to be right. Furthermore, the majority faction acting on their beliefs for a period of time may open up the possibility of relatively low-risk/high-reward opportunities in out-of-favor sectors.