From: Robin Hanson (rhanson@gmu.edu)
Date: Mon Jun 16 2003 - 06:52:44 MDT
On 6/15/2003 Dehede011@aol.com wrote:
>>Of course not everyone is rational; all that speculative trading
>>going on is proof of that. But when making a bet you should ask yourself
>>why you
>>think you are *more* rational than the folks you are betting with. Yes,
>>some
>>people are probably more rational that others. But clearly most people
>>over-estimate their own rationality. So do you feel lucky, punk? I'm
>>told that
>>an old poker adage is that there is a fool at every table; if you look
>>around
>>the table and don't see him, he's you.
>
> Let me try an argument on you, and the list, if only to get knocked
>down and hence learn.
> I say the market may not be rational in the sense that you can
>reliably predict movement. But it is emotional. If like Buffet you know
>what you
>want to pay for various good stocks -- in order to make the return you
>want --
>you will find from time to time people emotional enough to sell good
>stocks at
>cheap prices.
> That seems to be what Buffet has essentially been doing for close to
>fifty years and he has made a mint trying it.
Maybe Buffet is in fact much more rational than the average trader. And there
are people who win at poker too. But what makes you think you are another
Buffet?
Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323
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