February 2009
3 posts
The Collective Market Participant Basket Case
The simple truth is that measuring human emotion is extremely difficult. Expert researchers have been working at it since before the phrenologists felt the bumps on one’s head to divine personality.
Its so difficult to do because emotions are super complex, intertwined dynamically with other modes of experience and remote to direct observation.
So measuring market sentiment with the VIX...
Centralizing Accountability
I had a great breakfast this morning with Lindzon and Mick from Research Edge. Mick brought up the idea of centralizing accountability which I loved and which dovetails nicely with my piece on StockTwits and transparency. The idea is that up unitl now we have had all of these market pundits squawking whatever they want even when it means losing people tons of money with little accountability. ...
Loss Aversion, Evolution and Risk Complacency
Since the end of World War II, the U.S. has arguably experienced the greatest era of increasing prosperity in the history of nations. From 1945 to 2001 U.S. GDP and the Dow Jones Industrial Average both increased approximately 50 fold. At the same time, the abundance of and access to resources also increased exponentially. This increase in wealth has been a huge positive with regard to quality...