Why is the market so stupid and wrong most of the time?

C

Cutten

Look at the share prices of financials, real estate firms, and auto companies over the last 2 years. It was so obvious they were worth diddly squat and yet the market kept pricing them at ludicrous levels for 2 whole years. Even now when it's obvious most are worthless, at least in the equity, they still trade at billion or ten billion market caps.

Same happened with dotcoms.

Why is the market so stupid and blind to what is obvious right in front of its face?
 
Because the mkt loves logging on ET after the close and seeing people get so angry at it for not doing what they thought it should :D

Quote from Cutten:


Why is the market so stupid and wrong most of the time?
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Do I detect the frustration of a losing trade or day?



I ended up in the red today.

But it was my stupidity, not the markets.
 
there is a huge incentive to beliieve the good times will never end and behave as such in booming industries.

Its cult like when the pillars of their belief start getting kicked out from under. Its hard to make hay on a systemic level while the sun shines.
 
Quote from Cutten:

It was so obvious they were worth diddly squat and yet the market kept pricing them at ludicrous levels for 2 whole years.
More...

For 1.99 of those years, the market was right.
 
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