The *worst thing* about democracy is this thing people do where they vote based on peer pressure anticipating how everyone else will vote The irrational feedback loop this causes is responsible for at least 50% of the disastrous decisions made by voting
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Replying to @arthur_affect
Interestingly, we appear to be okay using an identical process as a tentpole to prop up major portions of our economy, i.e. the stock market
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Replying to @otorhinosaur @arthur_affect
I think people gain little a rationality when money is involved. Maybe
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Not really. I'm saving up money from my part time job and investing in stable, low risk index funds, and growth has been stagnant for weeks or even slightly negative because of "the Coronavirus". No one can say how they think the NASDAQ is directly affected, they just panic
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Replying to @BootlegGirl @Tuplet and
The rational part isn’t that granular - the idea is typically that the market is self correcting over the course of years or decades. But turbulent short term
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Replying to @mssilverstein @BootlegGirl and
Sure but at an elemental level, people buy stocks because they believe that others will believe the stock is good. You can completely untie that market from any product and it will behave in a very similar fashion.
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Replying to @otorhinosaur @mssilverstein and
This is sort of true, but not entirely; shares seem like purely abstract notions of value, but they are in fact backed by the assets of the company, since if you own 50%+1 of the company's shares, you control it (sort of). So there's a floor that wouldn't exist without a product.
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Replying to @BingoBingoBango @otorhinosaur and
Technically that depends on the terms under which the shares were issued, but sure There is a floor where if your share prices drop below it it means someone's going to buy control of the company and go "Fire everyone, sell all the equipment and take the cash"
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Replying to @arthur_affect @BingoBingoBango and
It reminds me that some companies have a LOT of cash sitting around.
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The "corporate raider" era of the 80s was traders taking advantage of newly deregulated markets to raise this floor and attack a bunch of companies as filled with fat cat executives sitting on piles of money doing nothing with it This was very controversial
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