3 ms·
That makes no sense.
by arcturus17 7y ago
That makes no sense.
- slumdev 7y agoIt's a riff on the "fearful when others are greedy and greedy when others are fearful" Warren Buffett quote.
- halfjoking 7y agoIt only makes sense if you don't comment it doesn't make sense.
- wastedhours 7y agoNot necessarily agreeing/disagreeing, but there might be some mileage in the notion. If people think it might crash, they may take some hedge stances that shore things up. If they thought the game will play on, they might take more risks and kick the legs right out from under the chair.
- Turing_Machine 7y agoIt sort of does. When people start thinking that a market is going to go up forever, that's a sign of a classic bubble.
- rmah 7y agoThe thinking behind "as long as people think it will crash, it won't crash" is as follows... 1) most people thinking that a crash is near means that they view the stock market to be overpriced. 2) this means they won't buy as much and inflate prices even further. in fact, many may start to sell. 3) this will tend to limit price increases and may even depress the markets a bit 4) Thus, while there may be a decline if economic conditions turn sour, there's a lower likelihood of a "crash" (large drop from current prices).
- nck4222 7y agoOr alternatively: 3) this will cause prices to start dropping, which increases uncertainty, and causes additional sells. 4) thus we enter a loop where uncertainty increases, which causes more selling, which causes price decreases, and the market crashes. Market prices are largely a function of market confidence. If confidence erodes, so does the market. It's how bubbles burst.
- sdinsn 7y agoIt does. If people think valuations are inflated and a correction is near, then then they'll be less likely to invest, which stunts valuation growth.