Have you kept up with the stock market? Have you seen these multi hundred points drops? Have you ever wondered why this occurs? There are numerous reasons of course, but at the pit of it you will find the psychology of the simple!
What do I mean by that? It's quite simple really. One person in the market reports that everything is bad and chicken little takes over and the sky falls! On the opposite side, when things are actually bad, some says the good times have returned and all the chicken littles agree and the market rises, jobs open up and everything flourishes. Why is this so?
Mainly because people are stupid! You see, the market does not move on reason, but fear! One large investor sells and all the lemmings line up and jump off the cliff in succession. Why do they sell? Because John Doe sold. Each one watches the other and when one jumps, all jump! When one large player jumps on the bandwagon and buys, the bandwagon fills up fast and the sky is the limit.
Don't get me wrong. The business cycle is alive and well regardless of Clinton lying to us in the 90's. However, the market moves on fear and hope. These are emotions and do not come from reason. Why is the stock market down so much? FEAR! What is the basis of the fear? Emotional gut reaction is all. You see, no reason there. Our economy is built on emotion and is like a child with out of control emotions. We need to spank this market very hard to straighten it up and make it act right. May I have the first whack? Thank you and pass the paddle.
Thursday, October 9, 2008
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2 comments:
I say, WHACK AWAY!!! It is so true, people are like robots, they are programmed to what everyone else is doing and/or saying.
as always, you are right on. the only thing we have to fear, is fear it self, and obama.
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