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> Stock markets are also priced according to _expectations That's the theory. Markets are in practice: . far more irrational than theory admits to, mostl
by ur-whale 7y ago
> Stock markets are also priced according to _expectations
That's the theory.
Markets are in practice:
. far more irrational than theory admits to, mostly because theory doesn't model feedback loops properly
. almost always subject to manipulation
- pwagland 7y agoYou are basically saying the same thing. Behavioural economics, in particular, says that expectations are not always rational. To be more precise, just because people expect that things will improve doesn't mean that they will. However expectations do drive behaviour, whether those expectations are rational or not.