Finance and Investing

Showing only those parts of the discussion that lead to #3965 and its comments.

See full discussion·See most recent related ideas
  Log in or sign up to participate in this discussion.
With an account, you can revise, criticize, and comment on ideas.

Discussions can branch out indefinitely. Zoom out for the bird’s-eye view.
Benjamin Davies’s avatar

The market often makes silly mistakes:

In 2021, Elon Musk tweeted "Use Signal" (referring to the private messaging app). Investors rushed into Signal Advance, an obscure medical device company, causing its stock to surge from around $0.60 to over $70 in days. The messaging app isn't even a public company.

Benjamin Davies’s avatar

Markets are made up of fallible people and are often wrong, sometimes wildly wrong about what an asset is worth. A good investment often involves reading the situation better than other market participants and going against the tide.

Zelalem Mekonnen’s avatar

Markets are also mostly based on knowledge from the outside. If you invest based on internal knowledge, that will be called insider trading (not making a moral judgement whether insider trading is good or bad).

Benjamin Davies’s avatar

Yes, but I think it is largely the interpretation of information that matters.

Different people respond very differently to the same information.