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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (7076)	10/13/1998 12:13:00 AM
From: Robert Douglas	Read Replies (3) \| Respond to of 9980

Stitch, One more thought I have had since my last post on the issue of market volatility. In theory (efficient market theory) the better the dissemination of news, the faster a market will react and the more efficient it will be. Therefore theoretically, the revolution in communications technology should have made markets more efficient and less volatile. I am skeptical. My belief is that markets only "pretend" to be efficient and actually respond to news more emotionally than intellectually. The result is that every little move searches for a reason for its cause and one is usually found for the "Nightly Business Report." It is because of the emotional nature of human beings that markets are so volatile. These emotions stem from the most ancient part of the human brain and are very difficult to understand and more difficult to control. Since our brains have evolved little since the introduction of markets, these markets react essentially the same now as they did 100 years ago and will 100 years hence, IMO. -Robert