One of my favorite financial reads is anything Morgan Housel writes!
He shared this today which I loved:
Financial markets are the intersection of $150 trillion, politics, dopamine, creative accounting, hopes, dreams, fight-or-flight responses.
— Morgan Housel (@TMFHousel) March 29, 2016
Morgan is dead on. Financial markets are a comedy and a clusterf*#k at the same time.
What Morgan left out was that all the above is now at your fingertips with FREE transaction costs (Robinhood) and the Wisdom of Crowds (what I refer to as ‘Smart Pelotons’).
When I demo or mention Robinhood to friends, the first question is ‘HOW WILL THEY MAKE MONEY’!
Cracks me up.
I go from showing people a product I love and using everyday to them worrying about the plight of the company. They become instant Venture Capitalists. The same people that have not sold Cisco or Lucent and likely hold some Excite at Home they figure could rally if the internet takes off again.
The crowd is still very cynical. The crowd is bruised and battered from 1999 and 2008. In January 2016 the crowd was told to ‘sell everything’…
Good times. pic.twitter.com/o4tcjXbi8c
— Irrelevant Investor (@michaelbatnick) April 1, 2016
You can’t blame the crowd. I love the crowd.
The crowd was very cynical of the internet (I once was too) ready to write off Tesla (guilty as charged), and fleeing from Facebook in 2012.
It’s ok to be in ‘the’ crowd, but it’s very possible to trade up to a smarter crowd.
The $150 trillion financial markets is the greatest game and behavioral experiment of all time. Feast on the behavioral weaknesses of the crowds. It’s a thrilling language.