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 [...]

  • 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. [...]

  • 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, [...]

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