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The tl;dr: anyone who thinks equity valuations are based on rational decision-making are going to be taken to the cleaners.
by lutusp 13y ago
The tl;dr: anyone who thinks equity valuations are based on rational decision-making are going to be taken to the cleaners.
- stormbrew 13y agoWell, for a certain definition of rational. I think the operative definition in this subject amounts to roughly "not random," though. People (or nowadays trading bots) have reasons, they just aren't necessarily good reasons.
- lutusp 13y ago> Well, for a certain definition of rational. I wasn't going too far afield -- by "rational" I meant on the basis of P/E ratios and other conventional sources of information, rather than mass psychology or hunches. As to trading bots, depending on how much capital they move, they can twist a small market until it cries uncle, and in a matter of minutes in the worst cases. That's rational by some definitions. :)