Is the Stock Market Irrational?
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- Опубликовано: 12 июн 2024
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The economic numbers look bleak, but the stock market is strangely optimistic... Has it lost touch with reality?
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sources:
Thaler, Richard H.. Misbehaving: The Making of Behavioral Economics. W. W. Norton & Company.
www.nytimes.com/2020/04/30/op...
www.longtermtrends.net/market...
en.wikipedia.org/wiki/Efficie...
onlinelibrary.wiley.com/doi/a...
en.wikipedia.org/wiki/Black_M...)
www.cnbc.com/2020/04/25/makin...
www.vox.com/covid-19-coronavi...
www.washingtonpost.com/busine...
www.investopedia.com/terms/m/...
smallbusiness.chron.com/emoti...
www.investopedia.com/articles...
blog.oup.com/2020/03/how-emot...
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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Philip Olson, CFP® and Julia Lorenz-Olson
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I actually like this video. Most "stock" market videos I see, is either someone screaming at you, or lecturing you, thinking they know better. But I like how your video is more informational without the "superiority complex" that I see from other videos. It's a breath of fresh air, thanks!!
Shoutout to such great channels for carrying my financial education
One thing is notice about bitcoin and forex is good news and bad news.
Felix is the idiot who doesn't understand why the stock market is in the rise now and the one who would buy at the end of the rise when the largest profits are always taken,and then he finds out he is a dumbass.p
I tried placing my trades all by myself but ended in a messed situation. I will advise you place your trade under an expert who knows how to handle the trades very well and of course a reliable one
Tired making some good returns from crypto but lost $2500 already😡😡
If got no professional skills and experience in trading and you want ahead to invest lol trading for one self is like gambling
Correction: the Feds has been pouring TRILLIONS into the economy, not billions
Pouring of money is clearly the biggest reason. World wide the number is already over five trillion. Big question is, is this the new norm or will there be payback time
@@teksgeroi the people who kept their money uninvested pay the price.
Fun fact: trillions are made up of billions. We said "billions" because a strong case could be made that all of the recent Federal relief isn't exactly "going into the economy", but certainly a lot of it is.
@@TwoCentsPBS Exactly. The possible correction should have been "not only billions, but trillions." However it's actually not going to the economy, just bailing out companies, right? Hundreds of billions are given to families in America.
@@TwoCentsPBS if not the economy then where?
Soooo what you’re saying is....”the stock market is not the economy!!” Thanks for always making awesome videos 🤘🏽
Wait...so you're telling me Donald Trump has been misrepresenting the economy all this time?
Are you being sarcastic
At this time Tradin Btc should be your Priority
Ignore all the Naysayers
How
Personal Finance should be a required course in high school. And your videos should be a integral part of the curriculum.
It's actually starting to be taught in more and more high schools
But are kids really paying attention? I graduated in 2015 and most kids weren't able to recollect what they learned that day.
Angry crowd is more likely to votes. Educated crowd is harder to be lied and manipulated by false narrative. Anything for more votes.
If they do that, there will be less credit card spending which means less spending and businesses will have less revenue which means bad for the economy, big businesses will do whatever they could to not let that happen, one of the ways is by “donating” to politicians
These guys are good! As someone with an international MBA equivalent, a CFA candidate, and an active stock market player I really enjoy watching the refresher videos made into such a fun presentation.
Wow, high praise from a CFA candidate? I know that one ain't easy!!
@@TwoCentsPBS Yeah, especially when summer 2020 has been canceled, December 2020 is up on the air, computerized 2021 is in question, and all the while the test is predominantly muscle memory :-/
Also, pro-tip, cucumbers pickle really flavourfully in Spanish queen olives brine once those are eaten. Done three rounds with salt top offs.
@@ClickLikeAndSubscribe Ugh, that's such a bummer! I remember I *almost* missed my scheduled CFP exam (scheduling mishap) and was sick to my stomach when I first realized it. Having to wait a year or more = my nightmare. You're right, the muscle-memory thing is totally true, and it weakens if you just wait around.
Also, it's a true TC fan that gives pickling tips. Bless you. I never buy olives (even though I love them) because Julia doesn't care for them. I adore the Spanish Queen brine too, simply fantastic tip. Thank you friend, and keep making the world a better place!
The market’s value is based on how people perceive the economy to be, not how it truly is.
The market's value is based on how much $$$ RICH people perceive the FED will give them next month!
@@sedonars1 Pretty much, lol. It's a completely rigged system. Grease the right palms and you become a permanent institution overnight that can no longer fail. In good times you win, in bad times you still win. Privatize the profits and socialize the losses, and then lecture the populace you just robbed of trillions about 'fiscal responsibility'. Oligarchy is fun.
Investor and customer confidence are high. And trends are backing that confidence for now
Facts
@Luís Andrade Moron I pay more in taxes than most people make in annual income. You're a 'useful idiot' running defense for people that shorted stocks and sold their portfolios in january because they knew they'd do a lockdown before they told anyone else about it. You're actually defending 10 trillion in tax money, let alone printed fiat bs from the federal reserve, being thrown stipulation free into the stock market and banks. Your shitty S&P index retirement fund isn't going to be worth jack shit when the government is engaged in insider trading and is intentionally suppressing wages in the country through bullshit pandemic lockdowns and mass immigration and H1B spam. Enjoy being stuck working your entire life with no retirement, no benefits, and being taxed without any actual representation as a modern day serf. If 90+% of the country can't even afford a home or retirement in 10 years, then what fucking good is your shitty 19% middle class share of the stock market?
And also on that note, how fucking stupid do you have to be to blame the massive transfer of wealth on welfare recipients, while also arguing in the same breath that the entirety of the country should dump several generations worth of tax revenue into the stock market as investment welfare for boomers and older Gen X to protect their retirements at the expense of everyone else? 30% of the US debt was accrued in 2020 alone because of this brainlet move and you want to talk about fiscal responsibility, lmao. All it was was transfering wealth and economic opportunity from your current/future kids and grandkids to people that are already at the end of their lives and financially secure. They're the ones that are going to be dealing with the brunt of permanently suppressed wages, unending cost of living surges, and hyper inflation while their own attempts at investment and retirement funds just get scammed and shorted through politicians conducting inside trading and artificially kicking in dips to profit off of economic collapses.
My humble hypothesis is that for the last decade we have been bombarded with stories of people who got fabulously rich by buying at the trough of the 2008-09 financial crash. Hell, every personal finance RUclipsr repeats (and rightly so) that people should not sell their holdings during a recession. So people, following the advice, avoided selling their assets when the first downturn appeared and even new ones joined, expecting a large upswing in prices when recovery starts. I can actually see this creating a bubble further down the road.
A lot of PF RUclipsr I knows have been going against their own advice and sold stocks. Beat the Bush and Graham Stephen seems to have sold
@@tiendoan1333 Graham Stephan didn't sell. He didn't have much stocks in the first place. He recently bought up to 3 percent of his earning in stock.
Agreed!
@@paulnelson5539 I find it interesting that your channel as well as Sarah's (the one surprised by and unquestioning of your results) are both less than a week old. That's all I have to say about that.
Aren’t we already in a hyper bubble in all categories?
All you need to know about this topic, from the Oracle of Omaha himself: "in the short term, the stock market is a popularity contest, in the long term, it is a weighing machine."
The confusion is that the market is both irrational AND rational. It is irrational in the short run, but rational in the long run.
“Markets can stay irrational longer than you can stay solvent.”
Buffet 2020: Be fearful when others are fearful.
Buffet" Those guys dont know the information I get but let then worship me.
Thank you, Ryan Gosling!
His name is Earl!
@@Dima80F bruh
Really nice content, I think the mistake most individuals make is logging on to youtube to get info on stocks to pick, without basic understanding on portfolio selection and risk tolerance.
Yeah true the stock market is really liquidated , You need to learn how to read the price on any stocks you wish on purchasing, there's really no shortcut around it or better still look out for financial advisor and let them handle your portfolio/trading account and in the process you also get to learn a lot from them with years of experience.
I can totally relate to this. I have watched so may videos on the right stocks to get but I still end up making losses. I think the idea of a financial advisor handling your account is the best choice for me right now. How can I get across to a reliable FA?
@@amirabdallah4751 You can do your research based on your preferences. I invest with Lorna Rose Sabbia tho a FA with efidelity investment. you could text her on teIegram: tradewith_lorna.
I've come across this lady on a fox interview before but I never made out time to reach out to her. Didn't know she offered this services tho. Thanks for sharing
@@amiraomar1927 Thanks Lorna I appreciate, I hope she replies me I will be patient.
the stock market is basically a graph of rich people's feelings over time 🤷🏻♀️
regular people not doing this methods and often it skewed :(
Not really. It is more about manipulation of stock prices from short sellers. They make money on the trip down, and then make more on the trip back up. If you get enough people using this strategy, you can change the price of stocks 10% or more. Stocks recently are actually he opposite of what the business is doing. Disney came under investigation and their stock price went up 5% in a day, netflix had a good quarterly report and they dropped 12% in a week.
Elon's tweet literally dropped Tesla's stock price. Why?
It sounds like is going to be a ugly crash in 6 months
Not true I'm in the stock market and I'm not rich people invest cuase there smart and dont wanna work till 80
Here’s a quote : “price can remain irrational longer than you remain solvent.”
Love your videos! I will start relying on them more now that I graduated.
Just found you guys and love it! Keep up the great videos!!!!
"Over the short term, the stock market is a voting machine. Over the long term, the stock market is a weighing machine."
Absolutely love your videos, keep them coming!!
Love your videos. Thanks for the great work!
Absolutely love this channel! Keep up the wonderful content!
You two are fantastic! I love this channel and always walk away learning something new! Thank you!
What a nice channel you have here, thank you for the knowledge!
Thank you for such a helpful video! I've always had a tough time conceptualizing why stock prices mean anything at all, when it technically just reflects what someone is willing to pay for and not actually coupled to the company's performance
You guys are just incredible!! N thanks for the knowledge
The way you put things on the table is amazing, great explanation, great timing, great effects, everything, pretty good and subscribing
Thank you for making high, great quality videos.
Thank you so much for explaining everything with such ease.
This was a very detailed well put together video. Thanks for sharing.
Awesome the 1/3 part!
Just here freshening up on my financial knowledge after the Great Gamestop Rally of 2021.
Amazing and we'll shared information, as usual.
I got hooked to your channel. Your videos are simple to understand, with lots of valuable information. Thank you for sharing all your knowledge.
You guys are so informative and that too in a short time n in a simple way.
Amazing video thx
Thanks for the vid!!!!
6:32 that's the guy from the Onion News Network!
Does anybody know where this footage was taken from?
Just some broadcast in the 80s. He was a real newscaster for over 20 years before being on the onion.
This explained so much to me. Thank you.
At 0:55 thats Downer theater right here in Milwaukee, WI
Thank You, awesome
There has also been a huge influx of retail investors, and with all the casinos closed some gamblers have turned to the stock market.
Did you watch the video...?
Top tier channel
great content
congratulation on what you achieved, you built something wonderful.
Good video!
Wow, this is very informative and very different from the other videos. I probably won't be noticed among the 300k other subs but I did subscribe today. thank you.
Amazing video, thank you.
I love you guys. So informative.
You guys are amazing! The same is happening in Brazil now. Pretty hard to understand why, since pandemia is getting worse here. Thanks for the awesome channel!
You guys deserve millions of subscribers! Thank you for being my financial educator ❤
Good! Thanks
I would love to see your take on the subreddit Wall Street bets
Awesome video guys. Can you make a video on budgeting apps?
Thanks two cents it well simplified even for a kid to understand keep up 👍🤙
Excellent Non Stop explanation.
Nice video for creating a group of traders, trying to speculate with the market. The market will always be efficient but the companies that compose the open market maybe don't translate to the "real" economy.
You guys are best persons!! Keep it up 😊
Y’all are so smart and cool! Thanks for breaking things down for us. You are the most enjoyable and therefore helpful finance people on RUclips. I really appreciate the empathy with how insane we all think some financial things are and your optimistic takes on stuff ❤️
Thank you so much -- that means a lot to us!
Enjoyable=/=helpful. But yes they're good.
You are amazing!!
I love your channel dears :)
From Egypt: I love you guys 👌🏼😊
Cooperation bailouts and government propping up the investor class is the reason why the stock market is doing well.
Riots are good for the stock market lol
@@rockstar-kp2jy why
@@ottopotatum5775 causes large moves in the market. Good or bad, large moves are good for most traders.
Awesome video
I have 3 trading account.
Account #1 - I sold nothing in 2020, but just kept buying more in regular intervals. This account is up 5.5% in 2020.
Account #2 I panic sold some near the bottom but I did buy some back as I saw prices recover. This account is down 7.4% for 2020.
Account #3: This account is 100% untouched in 2020, nothing bought nothing sold. This account is up 2% in 2020.
Conclusion: Never try to time the market. Above all, never sell even when you're down and there's blood in the streets. Just keep buying at regular interval and let cost averaging do the rest. If you can't buy at regular intervals then leave it alone. Never panic sell.
I'd say go a step further. Buy even more when large companies are "crashing". I threw a bunch at beoing a few weeks back. That's up 65% now. My Tesla from 2 years ago. Up 200%. I've never sold a stock, short of getting assigned with my covered calls. I'd say buy stocks that hold true value and have room for long-term growth. Hold on for the ride.
Short term the market can be emotion driven and irrational.
Long term investing is driven by logic and reason.
Invest regularly over the long term and you will do fine.
exactly
Did anybody see Jim Haggerty @ 6:30? 😂 WTF!? He was a real newsman LOL
This is an awesome video
Nice video! However I have a question 🤔
What about all the electronic trading?! I mean a large portion of trading is done by computers nowadays and you don't mention that in the video.. also how electronic trading works???
The video is a massive massive oversimplification of the literature, so don't have too much expectations. If you want a REAL investing media, I heavily recommend the Rational Reminder podcast, and Ben's Felix YT channel.
Tx for great videos. Would explain taxes and how to deduct it.
Those 💪 though.. inside out dad is using the quarantine time to bulk up.
This video was so chock-full of info, it did not feel like 9 minutes lol. Love this channel
Stay in the market,
By Staying Calm, Staying Collected.
Awesome Video.
Many Thanks
As someone had said, “The market is climbing a wall of worry.”
a great video
Yes.
Yes
😀😀😀😀😀wow, welcome you both.we love you a lot.
yes
Wow! Awesome video! Thanks for explaining the 2/3rds & 6 pretties faces games. They explain A LOT of what others sources fail to mention. Also its interesting that perhaps your greatest video followers your absolute worst "Are we headed for a depression?" I DON'T drink the Keynesian cool-aid. Please stick to personal responsibility financial advice that made me subscribe. "How cars keep you poor" is a great example.
So which stock to buy now that is undervalued?
ABSOLUTELY LOVE the less makeup in this video. Natural beauty! You look AMAZING! (Not that u didnt before)
Do you guys have Podcast ??
Great video! I've recently started investing and I love pulling from many different sources to gather my own opinion. Keep up the amazing content!
Stock price is not solely determined by how much others are buying and selling them. Please elaborate.
Can you make a video on "Different parallel sources of income" which are passive?
The Hertz stock price jump after bankruptcy filing demonstrated Thaler's hypothesis to me as well
So should I buy now?
I have invested in equities over the years and made money.
Its good to get "re-calibrated" on my own emotions on deciding what to buy (selling is easy) and how I might be influenced on how I might choose stocks.
Recent market drops have seen stupidly quick rebounds, like the end of 2018 and now, makes the whole thing pretty frustrating. I mean when the market drops a lot its good time to buy and dollar cost average, not all at once but a steady amount at a time. Here is hoping when it tanks next time it will chill down for a good long while.
The pandemic led me to u guys and Dave Ramsey. Blessings in disguise, I guess... (Srsly tho, the channel is dope!)
6:31 Is that anchor Jim from Onion News!?
This is a very rational video during a time when markets are behaving in an irrational manner. Keep up the good work "Two Cents" !
I wouldn't even say it's "irrational," I would simply say it's manipulated.
The stock market is not for gambling or short term growth. Historically, there have always been ups and downs. In the long term though, it always goes up. Ride it out.
Too much focus on short term volatility. It’s not irrational to expect the stock market to be higher in value in the future. In the long term, we’re awarded for our patience and discipline.
I wonder what Jack Bogle would say about these times we are living in..
Invest In Vangaurd and sleep more peacefully than Value hunters and Bugfet fanboys.
"The stock market is a graph of rich people's feelings" --Krystal Ball and others.
if that's the case, I would love to have my feeling reflected on that graph : ) I heard that from joe Rogan podcast too, it was a great podcast. either way, I enter the market with the right mindset 7 years ago, I am quite happy with that decision. hopefully, in 10 years, my feelings will reflect well on that graph.
Rich people tend to feel good.
So if I understand you correctly, basically in the short term prices are volatile and irrational, but in the long term they reflect a companies profitability and "real" value?
I've probably listened to over 50 hrs of podcasts about value investing. Only now watching your video did I finally grasp what it means lol
I would love to hear them talk about the recent GameStop situation.
Being an amateur trader, I can atleast tell that this is actually very common thing in the market. After getting some news and idea, we always think how the general people would perceive the market. That's why, in trading, the most important thing is to understand the psychology of other traders in the market. It is all about the way people thinks and not how you would think to a particular scenario.
This rally is also driven by quantitative easing
Aka print a shit load of money
Space Shuttle coupled to a Saturn V rocket, LOL.
Everytime I check the Dow after a rally I'm like BRUH. Everytime
You should make a video about Kiddie tax brackets and how to calculate it