Dive into the archives.


  • Lack of demand and the destruction of self-esteem

      Just having finished my earlier post, “Psycho-Economic Depression“, I came upon this by Fritz Schumacher, from “Small is Beautiful” (pages 203-204). It seemed to fit: If the nature of change is such that nothing is left for the fathers to teach their sons, or for the sons to accept from their fathers, family life [...]

  • Pairing: Bernanke as an Answer Among Uncertainties

    Recent behavior in financial markets really does resemble the dynamics of large groups. Markets, like groups, struggle through long periods of anxiety, attempting to reach some momentary closure that brings sense— at least temporarily— to interactive flux. A perfect example has been the elevation of the Fed’s Ben Bernanke: from Rick Perry’s recent derogation of [...]

  • The Markets’ Increasing Dread

    It has been a few weeks since the “resolution” of the US debt crisis. And there has been a cascading erosion of public confidence as unemployment, diminished growth and “Japanization” in Europe and the US, increasing dangers of Eurodebt sans Eurobonds have correlated with a 16% drop in the S&P ( a measure of convenience). [...]

  • Waiting on Investments

    Retail investment requires two kinds of trust:  one monetary and the other, a trust in expectations. Together, their demand for fulfillment is that the investor must wait. Necessarily, the investor spends a lot of time waiting: waiting for a good market entry point; waiting for a target exit point; waiting for market trends to turn; [...]

  • Waiting for Salvation or Damnation in a Stock Downturn

    Remember the sound of a falling tree in an un-peopled forest? Watching its price as a stock plummets in the absence of corporate explanation might echo the same sound: if the clamor from retail investors were not so loud! Recently, I’ve been studying equity message-boards in relation to investors’ management of anxiety as stocks descend [...]

  • Online Equity Message-Boards as Virtual Workteams

    To paraphrase Tolstoy, all buoyant stocks are the same; while the issues sinking fast are all different. Two types of decline are notable: the first is cacophonous— in which too much information and noise are continuous, as with BP stock during the 2010 Gulf oil spill. The other is silent: with the stock’s initial drop [...]

  • Emotions, Expectations, and Equity Message Boards

    Given that the annual trajectory of individual equities describes a bell-shaped price-curve reflective of aggregated emotions and expectations, there is a fascinating local development as passions and prices approach the tantalizingly underpriced (or overpriced) tails: the online message boards dedicated to individual stocks become the setting of passionate argument and diatribe reflecting the blood-sport of [...]

  • Behavioral Finance: Happy Days Are Here Again

    Behavioral finance begins with the setting of a question. For the individual investor, the question might be put, “what is going on in the market that is out of synch with fundamentals of reality?” For the market maker, wishing to influence market participants, the same question may be addressed— though acted upon to different ends. [...]

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