What Market Isn't Gamed?

Feb 28th

Today Shanghai's Composite Index lost nearly 9% of it's value. And the Dow Jones Industrial Average dropped nearly 200 points instantaneously right around 3:00 p.m. EST. When the stock (or commodity) prices go up or down value is neither created or destroyed, but shifted and/or consolidated. Wealth is nothing but a form of market leverage. The people running the stock markets do not even know what they are worth:

"The market's extraordinary trading volume caused a delay in the Dow Jones data systems," said Dow Jones spokeswoman Sybille Reitz. "We decided to switch over to the backup system, and the result was a rapid catch-up in the published value of the Dow Jones industrial average."

Spokesmen for the NYSE Group Inc. and Nasdaq Stock Market Inc. could not immediately confirm whether all closing share prices were valid. A spokesman for the Big Board said it experienced "intermittent delays and are currently assessing the situation." The Nasdaq said it was "confirming" the closing numbers.

I think market glitches like these also relate to SEO and marketing. The more reliant you are on any one source / technique / strategy the more often you run into glitches and the harder they hit you.

I think understanding the web and how search interfaces with other business models allows you to know many markets better than the market does. The hard part is investing without emotional attachment or greed. Read more about the drop.

Published: February 28, 2007

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Comments

ray
February 28, 2007 - 3:49am

I read you blog daily and agree with you 100%, except that "Greed is good".

February 28, 2007 - 5:19pm

Could you give an example of:

The hard part is investing without emotional attachment or greed.

to help me understand what you're talking about?

February 28, 2007 - 5:34pm

Well IMO one shuld always have multiple options opened if a particular one does not work. Ups and downs are there and if they are not then things get boring.

February 28, 2007 - 6:49pm

When investing into other's businesses it is easy to get attached to it...on smaller company investments I think you really have to be attracted to and attached to the business and idea, but if a company is already big their stock price will probably move the way it wants to no matter what ideas you come up with or forces you can apply to the market.

Most small investors lose out to larger ones due to emotional attachement to their money and assuming the near future will mirror the recent past.

Patrick
March 1, 2007 - 1:32am

When I was in my teens I head over heels into the stock market and invested together with my dad..because of lots of luck I picked shares such as yahoo, dell, aol and nokia (before teenagers had cell phones) and well sort of got lucky with my small investment..my dad unfortunately got tooootally attached to those stocks and everytime they hit the set stop-loss price, I sold mine, but he said

'now that they've come down so much, they're cheap anyways so Ill just keep them. Would be silly to sell them, now.'

The only problems with that approach were that if you go about it that way you can ditch the stop loss prices right away as they won't help you control your risk profile, if you dont adhere to them....and I think everybody knows those internet stocks came crashing down just as much as they went up ^^.

Taught me a whole lot about risk management at that young age, though..and I think emotional attachement is the reason why most ppl lose money with things like that..

Take sports betting for example, pros or smart bettors who are at least marginable profitable look for inefficiencies..where the odds are better than they should be, because of public opinion for example...the wast majority (tons of people I know) however just bet on teams thinking they can actually predict which team will win...and more often than not are influenced by their emotional attachement to teams they like...

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