Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally
by ashtonkem on Friday September 04, 2020 @04:53PM
(#24378783)
Interacting with traders would have broken you of that illusion too. Professional traders are much more prone to group think than they’ll ever admit to, which occasionally causes the market to do sub-optimal things.
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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally
by Slartie on Friday September 04, 2020 @06:55PM
(#24379720)
I am more and more coming to the conclusion that a huge portion of susceptibility to groupthink even seems to be a central requirement to be a "good" trader (as in: one who outperforms the market).
If you just go with the trend most of the time, you take part in a self-amplifying hype cycle that pushes all participants' equities higher. Whereas if you try to "outsmart" the group, you will fail most of the time, even if you might be right in your skepticism, because stock prices aren't strictly based on actual objective reality, but more on the perception of reality by most market participants.
Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally
by ethbr0 on Friday September 04, 2020 @10:36PM
(#24380967)
Aka the important thing is not to be right, but to guess when most people will also decide you're right.
Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally
by readlikeasloth on Saturday September 05, 2020 @09:30AM
(#24383386)
I think you just described the Keynesian beauty contest: https://en.m.wikipedia.org/wiki/Keynesian_beauty_contest
Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally
by Slartie on Saturday September 05, 2020 @06:29AM
(#24382640)
Exactly. If it eventually turns out you were right, but most people didn't realize that at the time you traded according to your eventually-proven theory, you will have incurred huge losses at the point in time you finally are proven right. The icing on the cake is that you might even have given up on your idea and eventually decided to just go with the flow regardless of how stupid you think it is, and that might just be the time the market eventually concludes you were right all the time. Then you lost twice.
Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally
by SZJX on Saturday September 05, 2020 @03:44PM
(#24386362)
If one is a true contrarian then one would certainly stick to their position until the end, or at least wait for chances along the way while unyielding in their underlying belief. Otherwise the only conclusion is that they are not firm enough in carrying out what they believe in. Of course if they have a bad timing in their execution, they would still end up losing, but lose twice they won't.