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What is a price? It's the amount two people agree to transact for, nothing more. Price trends don't necessarily mean anything, and corrections are good as muc
by grandalf 11y ago
What is a price? It's the amount two people agree to transact for, nothing more.
Price trends don't necessarily mean anything, and corrections are good as much as they are bad.
A correction means the previous price was incorrect, yet when prices fall humans sentimentally believe the old, higher price must have been correct. It's ridiculous.
Governments take extensive measures to control prices and to alter public perception of risk. Sometimes this adds stability to prices, but it often sets things up for a more drastic correction later.
Some investors are over-leveraged and must cash out to avoid ruin. Others are speculators trying to ride various trends, but in the end we all benefit from prices being corrected.
- fleitz 11y ago> yet when prices fall humans sentimentally believe the old, higher price must have been correct. It's ridiculous. Only sellers believe this, buyers believe that the old lower price was correct and they are being gouged. (See anyone who tries to buy a generator after a hurricane)