Demand and expectations
The financial market is driven more by expectations of future demand than by past fundamentals. It is an emotional theatre where stories, narratives, and psychology dictate direction far beyond the underlying fundamentals.
Category Markets
Market expectations
Stocks don’t do good or bad; they do better or worse. Everything is relative to market expectations.
Extreme valuations
Investing in something just because it is cheap is likely a value trap.Shorting something just because it is expensive is a death wish.
Gravitating towards the rational outcomes
Markets and securities are often overbought or oversold, and they can maintain or extend those conditions for a long time. The outcomes that are more likely to happen may not happen until long after they first became likely. Markets can…