A rant on market sentiment & market psychology. How irrational can humans be.
Why does someone like coca cola. Do a survey & ask following questions.
Are you favorable to coca cola as a coy? Are you favorable to coca cola as a product Do they like coca cola because of the bubbles rising at just the right speed. Do they like coca cola because of the taste? Do they like coca cola because of the color of the can Do they like coca cola because artwork/graphics Do they like coca cola because of the way it washes down food or any relevant/irrelevant question
Collate & analyse all answers to questions and you find there is a strong correlation between those that are favorable for product & coy ; also answer yes to all questions in a way that is also favorable to coy & coca cola as a product. Those that say yes to questions, which is favorable, also say yes to all questions that are favorable to coca cola. This phenomena is called the halo effect. A halo is something mysterious around all human beings & objects and I suspect market psychology to shares & coys is no different. technical analysis is just the expression of all reasons why people favor a share & it is collective. I cannot explain it. As it is a statistical phenomena, then maybe people do not know why they buy shares. Changing their minds become easy and they can do it together without any communication. It is as if within each individual it is finely balanced and in fact what people say is BS & not rational. Hence lemmings all running at exit at slightest impression of certain attributes around a share. Companies, industries, issues all have halos and I suspect it is statistical & embedded in LT interaction of human beings reinforcing neural network patterns embedded in the brain.
I am struggling here, except to say I believe in the halo effect & one minute everyone is all for & buying & next minute in an irrational way everyone is selling the same shares they loved dearly a few days before. Humans do not know why they are favorable to a coy, they just answer the questions the same way to be consistent to the point they are lieing to themselves. Suddenly with the slightest provocation markets change from loving to hating a share. Just like a divorce. Now I know why, I do not know why I remained married & faithful all these years, I must be just stupid.
wbddrss
SLR Price at posting:
$1.02 Sentiment: LT Buy Disclosure: Not Held
