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Psychology has always been part of the market, and this event can be explained by Soros' theory of reflexivity - that the stock market leads the fundementals, n
by hacker_9 6y ago
Psychology has always been part of the market, and this event can be explained by Soros' theory of reflexivity - that the stock market leads the fundementals, not the other way around. Once you forgo the efficient market hypothesis (and it's never been more obvious how incorrect this is), this event makes more sense. Same as Tesla, momentum is a psychological event lead by a positive feedback loop.
- chii 6y agowhy do you need to forgo the efficient market hypothesis? The market as a whole takes into account the psychology of people as well, because peole participating in the market do so.
- justforyou 6y agoThere's nothing efficient or concrete about psychology.
- delaaxe 6y agoNot a single person who believed in the efficient market hypothesis ever made a lot of money.