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Keynesian beauty contest [1]. They don't pick the best assets. They pick the assets that they think most people are going to think are the best assets. [1] h
by stakhanov 4y ago
Keynesian beauty contest [1]. They don't pick the best assets. They pick the assets that they think most people are going to think are the best assets.
[1] https://en.wikipedia.org/wiki/Keynesian_beauty_contest https://en.wikipedia.org/wiki/Keynesian_beauty_contest
- synu 4y agoWouldn't a Keynesian beauty contest be more like they don't pick their personally favorite assets, they pick the ones that they think are going to perform well in the market? As a kind of strategy?
- stakhanov 4y agoIsn't that exactly what's happening? A pre-seed investor invests in assets they think seed investors are going to like, seed investors invest in assets they think series-A investors are going to like, series-A investors invest in assets they think series-B investors are going to like, ..., series-whatever investors invest in assets they think IPO-subscribers are going to like, IPO-subscribers subscribe to assets they think the secondary market is going to like. At some point in the process someone goes: ...hang on a minute. But by that time, the asset is owned by you and me, through the indirection of pension funds, sovereign wealth funds, and the like.
- ttyprintk 4y agoThis is, I think, essential to any equity market. Some domains are so boring that only inside information rivals judgement. Cardboard boxes. Some other domains are so bubbly that feeling the zeitgeist of the crowd might outperform judgement. Tulips.