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 [...]
- 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 [...]
- The Psychology of Investment “Value”
Warren Buffett has famously said about equities that “price is what you pay, value is what you get”. Hearing this, the investor nods: yes, it sounds correct— buy cheap, sell dear. But buy cheap, sell dear isn’t so easy. Something must transpire in order for this to happen. That something is the market’s attention and [...]
- The Electronic Herd and the Market as Open System
The current sway, within market systems, of what journalist Thomas Friedman called “the electronic herd” has revolutionized the way in which retail investors must approach the market. No longer are the benchmarks of financial statement analysis and technical analysis sufficient to judge the attractiveness of equity offerings. Rather, because of sudden and turbulent shifts 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. [...]
- Fixing the Financial System: The Bank of England’s Systemic View of Organizational Behavior
Andrew G. Haldane , Executive Director for Financial Stability of the Bank of England, delivered a remarkable paper at the April 2009 meeting of the Financial Student Association, in Amsterdam. Entitled, “Rethinking the Financial Network”, its deserved acclaim in the world press concerns its reliance on the study of complexity in natural systems: from epidemiology [...]
- Stunned By the Dow
Watching the market drop precipitously, again, I wonder at my friends’ silence. Exhaustion? Too much time since the last drop, too much hope spent (“my broker is a genius….see here, we’re up again!”) one time too many. Stunned? Incapable of considering the implications: too too too too to wrap the mind around. As I write, [...]
