the stock market presentation copyright© 1997, 1998 by barry and deborah brownstein
TRANSCRIPT
The Stock MarketThe Stock Market
Presentation copyright© 1997, 1998 by Barry and Deborah Brownstein
ForecastingForecasting
“..the knowledge of the circumstances of which we must make use never exists in the concentrated or integrated form…”
Q. In a ‘average’ year of interest volatility, if you invested a $1000 in treasury bill futures and were correct about the direction of interest rates for 52 straight weeks how much money would you have?
New Era or Mania?New Era or Mania? Mania- excessive or unreasonable enthusiasm-
stocks?, beanie babies and tulips ‘in normal market behavior the long-term
direction is up but it is interrupted by setbacks’ ‘a mania produces powerful persistent rises with
fewer setbacks, broad public participation and historic overvaluations by all traditional measures ‘
More Ideas To ConsiderMore Ideas To Consider
Markets are a spontaneous order and perhaps are inherently unpredictable, but not random
Do events drive markets?
– If you had tomorrow’s newspaper could you predict the market?
Speculation plays a positive role in markets
– only coercion creates a conflict between consumers and firms
Still More IdeasStill More Ideas
Most predictions are based upon past experience and thus miss turning points
That which ‘everybody’ knows has no entrepreneurial value
Limiting markets is generally a bad idea
– the complexity of markets is beyond rational planning (the pretense of knowledge)
Recommended ReadingRecommended Reading
The Edge of Chaos by Bernice Cohen Manias, Panics and Crashes by Charles
Kindleberger Extraordinary Popular Delusions and The
Madness of Crowds by Charles Mackay Money Meltdown by Judy Shelton America’s Great Depression by Murray
Rothbard