“Program Trading Gone Wild,” the Sequel? What’s behind gyrating stocks the last three weeks or so? (I know, it seems much longer). Here are two theories: One. Age-old human emotion — fickle, fear-and-greed driven human psychology — is the culprit. In particular, less experienced “retail” investors who chased high-flying tech stocks, and are now freaking...Read More
The King Has No Clothes Currency “Bitcoin mania reached new highs as the price of the digital currency jumped about 40% in about 40 hours, surging past the $16,000 mark.” —The Wall Street Journal (Dec. 8, 2017). Why is gold valuable? Mostly, because you can buy things with it, and only (very) secondarily, because you...Read More
Retail Investors, Loss Aversion, and The Fear of Missing Out (“FOMO”) Being a good contrarian, let me toss this one out there: skyrocketing stocks may go higher yet from here. In fact, I see two factors fueling further gains, at least in the short run: One. “The Headline Factor” & (some) retail investors’ Fear of...Read More
Price Discovery, But Now With Fewer “Patsies” “If you’re playing poker for half an hour, and you don’t know who the patsy at the table is . . . it’s you.” –Warren Buffett As super-cheap exchange traded funds (“ETF’s”) proliferate, Wall Street is fighting back. The latest salvo: a new academic paper suggesting that ETF’s...Read More
Is Facebook Stock a Bargain? “Small Investors May Get to Own Bit of Facebook.” –Headline, The New York Times (5/4/2012) “I would never want to belong to any club that would have someone like me for a member.” –Groucho Marx (oft-quoted by Woody Allen and many, many others) Is Facebook stock a deal at a...Read More
