Comments on: Noise and Crowds…So Costly

By: What Worked Today 1052007 | Trading the stock market everyday

What Worked Today 1052007 | Trading the stock market everyday — Fri, 05 Oct 2007 23:51:23 +0000

[...] direction when there is nothing saying we’ve topped. I talked about how I missed CROX over at Howard Lindzon’s the other day in response to his “noise” post. I despise noise. Its an opportunity [...]

By: Phillip

Phillip — Tue, 02 Oct 2007 20:17:11 +0000

If you want a real growth stock buy

OMEX, they are going to the moon…

By: Phillip

Phillip — Tue, 02 Oct 2007 20:15:51 +0000

Crox are a crock, and if you buy them now you will be bitten by the alligator. We have a company who is out on roadshows pumping their stock, knowing full well that the growth is slowing down, they are banking on “new” unproven products and that is a very dangerous strategy. Dump Corx buy NIKE and I am short as of this week at 64.25, it is going to go to $45 soon, beware the October market……

By: Julia

Julia — Mon, 01 Oct 2007 17:24:46 +0000

Anyone who has ever tried Crocs loves them. I bought my first pair this summer. I loved them so much I bought a second pair for me and one for my mom and my sister. Now we’re all planning on buying new Crocs for the fall/winter weather. That’s three more people buying three more pairs of Crocs. This is above and beyond the fact that my sister buys new Crocs for her kids every time they grow out of a shoe size, they get a new Croc. And that can happen every 2 – 4 months with young kids. Food for thought. I will disclose that after I bought the shoes, I bought the stock and own it today because I think the shoes are game-changers. Just like Apples iPod was a game-changer for the MP3 market.

By: TraderMark

TraderMark — Mon, 01 Oct 2007 15:27:24 +0000

Richard Emerson just summed up the stock market for me “In summary: When analyzing a crowd think what the dumbest person in the crowd might do and that’s probably what the crowd will do.”

Sometimes we sit and try to be so intellectual and logical, and try to think like a sophisticated primate. When in fact, what he just said is how the ‘masses’ think. So when you sit there and say “well that makes little sense” from an intellectual point of view – you have to remember the lowest common denominator of thinking. Hard to do and I keep trying to separate the 2 every day – dissassociate how a logical rational person would think versus group think on the street.

By: StockRake

StockRake — Mon, 01 Oct 2007 15:21:30 +0000

I hate noise. Noise ruined CROX for me.

Plus I was in friggn Singapore in Oct 2006 when I noticed they had Crocs stores and every kid and the mother was wearing these shoes. Oh I was too wearing them too btw. CROX was trading under 20 bucks at the time.

I’m definitely a putz for missing CROX. I saw all the signs, I blogged about it, knew it was going to be hot, knew they would make money, knew all the nurses in the hospitals were wearing them, was wearing them myself, but succumbed to noise and missed big profits.

By: dfross

dfross — Mon, 01 Oct 2007 12:56:57 +0000

Careful on Crocs. Lots of copy cats. Sketchers and a lot of no-name brands make shoes that look like Crocs. My 13 year old daughter wanted a pair of Croc-like shoes….she didn’t care whether they were actual Crocs or look alikes. She bought a copy-cat shoe. She likes them. Her attitude may not be indicative of the general public, but if is, then Crocs may have some trouble ahead.

By: Shrek

Shrek — Sun, 30 Sep 2007 22:20:13 +0000

This is a great post. Contagions are underrated.

By: richard emerson

richard emerson — Sun, 30 Sep 2007 16:37:13 +0000

Howard: You should read, “The Crowd” by Gustave Le Bon. A quote, “The masses have never thirsted after truth… Whoever can supply then with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

It’s a tough read like Faulkner or the guy who wrote “Lord of the Rings”. It was written in 1890 something. I didn’t find it political, but what is politics but a group of people making policy.

In the case of a crowd, the collective of the crowd doesn’t make policy, the crowd as a single person, individual, does. Hard for me to understand, here’s my example: Let’s say you, Howard, have an intellect of 9 and would never loot, I have an intellect of 7 and would also never loot, but someone with an intellect of 6 or lower might. If we were a crowd our combined intellect would be one lower than the lowest in the crowd, me, which would be below 7. Why? Because the crowd needs to communicate and it can only communicate at a level that is common to everyone which would be below the lowest of the low of the group, me. In this example it would be 6 or less, you being 9 and me being 7. Gustave points out, my paraphrasing, that a town of law abiding citizens would never loot, but as a crowd they might because the intellect individual of the crowd is lower than the lowest making the crowd individual separate and distinct from each individual that makes up the crowd. The crowd individual has its own intellect not a collective intellect. This brings about an anonymity effect since no individual in the crowd is of the intellect of the crowd individual.

In summary: When analyzing a crowd think what the dumbest person in the crowd might do and that’s probably what the crowd will do.