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No, stepping out for coffee is the rational thing. Seeing irrational behavior around you means your model of the world is either broken or not applicable to the

No, stepping out for coffee is the rational thing. Seeing irrational behavior around you means your model of the world is either broken or not applicable to the situation, something worth chewing on for a while. "When you don't know who the sucker in the room is, the sucker is you".

vasilipupkin 11y ago
how do you define irrational behavior ? what makes a 50% decline irrational ?
- droffel 11y ago
  An analogy: In a fictional world, an envelope costs $1, a piece of paper costs $0.50, and a stamp costs $0.50. In total, a full letter costs $2. You know that anyone on the street would be willing to buy each of those items at the component price. Would you not agree that seeing all 3 sold as a bundle for $1 would be irrational?
  - vasilipupkin 11y ago
    no. If someone has a model that tells them everything is about to get cheaper in the next 2 hours and will and cost 50 cents, then rushing in to sell the bundle for $1 is not irrational.
- dnadig 11y ago
  Since ETFs are derivatively priced, it's irrational on the face of it. If I sell you a bundle of 100 $1 bills for $50, it's irrational. ETFs are wrappers around stacks of stocks.
  - vasilipupkin 11y ago
    not unless the ETF leads the basket of stocks down. For example, futures often lead cash, why can't ETFs lead their constituents ? if stocks are about to go down 50%, there is nothing automatically irrational about ETFs on those stocks going down 50% first. But, as I said elsewhere, if you think it is irrational, then buy the ETF
dragonwriter 11y ago
> Seeing irrational behavior around you means your model of the world is either broken or not applicable to the situation Or that people are actually, as has been demonstrated in any number of ways, irrational. The idea that perceiving irrationality means there is something wrong with your world view rather than that there is actual irrationality in the world is somewhat odd.

vasilipupkin 11y ago

how do you define irrational behavior ? what makes a 50% decline irrational ?

droffel 11y ago
An analogy: In a fictional world, an envelope costs $1, a piece of paper costs $0.50, and a stamp costs $0.50. In total, a full letter costs $2. You know that anyone on the street would be willing to buy each of those items at the component price. Would you not agree that seeing all 3 sold as a bundle for $1 would be irrational?
- vasilipupkin 11y ago
  no. If someone has a model that tells them everything is about to get cheaper in the next 2 hours and will and cost 50 cents, then rushing in to sell the bundle for $1 is not irrational.
dnadig 11y ago
Since ETFs are derivatively priced, it's irrational on the face of it. If I sell you a bundle of 100 $1 bills for $50, it's irrational. ETFs are wrappers around stacks of stocks.
- vasilipupkin 11y ago
  not unless the ETF leads the basket of stocks down. For example, futures often lead cash, why can't ETFs lead their constituents ? if stocks are about to go down 50%, there is nothing automatically irrational about ETFs on those stocks going down 50% first. But, as I said elsewhere, if you think it is irrational, then buy the ETF

dragonwriter 11y ago

> Seeing irrational behavior around you means your model of the world is either broken or not applicable to the situation Or that people are actually, as has been demonstrated in any number of ways, irrational. The idea that perceiving irrationality means there is something wrong with your world view rather than that there is actual irrationality in the world is somewhat odd.