A Few Lines for Reflection

Amar Pandit , CFA , CFP

The Stock Market might be efficient (at least in theory and in books) but the people in it are not efficient.

The Market might even be rational (again in theory) but the people participating in it are nowhere close to rational.

The stock market is not a casino but the people participating in it make it worse than a casino.

Additionally, we assume that everyone in the stock market is playing the same game. However, the reality is different people keep playing different games in the stock market at different points of time. And the best part is that all of them are driven by their feelings, emotions, biases, and blind spots.

Therefore, even though excel sheets, algorithms and AI might capture many things, they can never ever capture the greed, fear and stupidity of people in the stock market.

And these are the fundamental truths of the stock market.