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by
Vadim Pokhlebkin
6/9/2009 2:00:00 PM
It's becoming a hazy memory for many investors, but you may still remember the unbelievable volatility we saw in the DJIA and S&P500 just eight months ago. The reason why those wild gyrations of the world's benchmark stock index were so hard to believe was because it just didn't seem rational. Well, see if this explanation from Bob Prechter sheds any light on that…
Filed Under:
efficient markets, crowd psycholog, psychology of crowds, herding
Category:
Stocks
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by
Alan Hall
5/19/2009 5:15:00 PM
With more than $4 trillion in losses, 9% of the labor force now unemployed, industrial production down 13% from a year ago and most company profits falling or crossing the zero line into losses, it has become starkly evident that the economists who failed to see the crisis coming really don’t understand what drives the economy.
Filed Under:
waves of social mood, Economy, Shiller, Animal Spirits, herding, social mood, Robert Prechter
Category:
Economy
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by
Vadim Pokhlebkin
10/9/2008 7:30:00 PM
On a day when the DJIA fell another 678 points to close below 8,600, it seems appropriate to talk about the herding impulse in humans. We at EWI observed decades ago that the financial markets are anything by rational. Now the mainstream media is also picking up on this fact. So why has the stock market "become a case study in the psychology of crowds"? Here's an eye-opening answer.
Filed Under:
herding, Investing, Wall Street, crowd psychology, market psychology
Category:
Stocks
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by
Editorial Staff
2/15/2008 1:00:00 PM
The law of supply and demand reigns at the shopping mall because consumers are pretty certain of their needs and resources, so they can reason their way through the decision process. But investors are uncertain because they have no basis to decide a fair price.
Filed Under:
herding, socionomics
Category:
Classic Prechter
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by
Alan Hall
2/20/2007 1:15:00 PM
"Tire Reef off Florida Proves a Disaster," read a USA Today headline. About two million old tires were dumped in the ocean off Fort Lauderdale in 1972 in an attempt to simultaneously create an artificial reef and reduce the mosquito-breeding habitat provided by old tires. "Now" we find that marine life won't grow on the tires, which break loose, move around, scour the bottom, damage natural reefs and wash up on beaches. To retrieve and dispose of a single tire from the ocean costs about $16. A main proponent of the tire reef plan, an otherwise respectable professor of "ocean engineering" at a Florida university, says, "I look back now and see it was a bad idea."
Filed Under:
herding, consensus, paradigm
Category:
Cultural Trends
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The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.
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