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To your first point, of course people "talk their book." It's a chicken and egg problem. And though it's in theory possible for someone to convince the market t
by theseatoms 11y ago
To your first point, of course people "talk their book." It's a chicken and egg problem. And though it's in theory possible for someone to convince the market that the price of something should be higher, it's virtually inconceivable for this to happen in the global energy market, especially if the party in question's financial interests are publicly known. (In less liquid markets, this can become a valid concern.)
Your second point is much more solid. I'd like to see more empirical data regarding people's risk preference across different contexts and magnitudes. Seems like an interesting topic.
- _yosefk 11y agoI didn't mean that energy prices are affected by a guy on HN voicing his opinions on them, just that many people become more likely to voice their opinion because of having a position, because they feel good when they convince others, even if doesn't actually affect anything (much the way I'm typing this comment right now... WTF am I?) So someone saying that they have a position in a commodity is not necessarily a good source of cool-headed arguments supporting that position. (At the very least convincing others makes those others lose money together with you and I believe it's tremendously more fun to many people to lose similar amounts together than losing more than your reference group.) But I agree that in hindsight, I did not phrase my original comment to convey the above, I ended up conveying what you refuted...