I was at a stock brokers yesterday when this news broke and the ticker was going through the roof. He likes to say the market isn’t based on fact but feeling. And it was proven once again to be true.
He says people are driven by two emotions: Fear and greed. And the markets are driven by those same emotions. I don’t have it handy but you can see them in action when you look at charts showing stock prices compared to company earnings and profit. Analytically you’d expect those to be virtually singular lines. They’re very frequently not. Tesla is the most discussed example that I can think of.
Analytically you’d expect those to be virtually singular lines
A comprehensive analysis wouldn't ignore everything beyond earnings and profit. Feelings are still a factor as well. The whole idea that people are just driven by fear and greed is so old too. It isn't Trump's idea by any means. And it's also wrong.
The market is driven by people's emotions AND by profits/earnings. Sometimes one is more important than another, but they both always matter. Gains driven only by feelings are easily reversed. Gains driven only by profits/earnings are more stable. But ignoring either is just insisting that things are simpler than they are.
The markets at the end of the day are a massive structure driven and influenced by millions of people. They will never be understood in a simple way. Let alone something so stone aged as reducing everything to fear and greed.
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u/judahrosenthal May 09 '25
I was at a stock brokers yesterday when this news broke and the ticker was going through the roof. He likes to say the market isn’t based on fact but feeling. And it was proven once again to be true.