Well, you have to remember two things about the market, one is they are made up of very sharp and sophisticated people who are some of the greatest brains in the world. And the second thing you have to remember is that financial markets–to use the common phrase, are driven by sentiment.
What does that mean?
What does that mean. Well the thing is, let’s say things are going along as normal in the market, and then suddenly, out of the blue, one of these very sharp and sophisticated people say, “My GOD! Something AWFUL is going to happen! [Grasps face in despair] We’ve lost EVERYTHING! My God, what are we going to do, WHAT ARE WE GOING TO DO?
Shall I jump out of the window?
Shall I jump out of the window. EXACTLY! Let’s all jump out of the window! SELL!
SELL!
SELL!
SELL!
SELL!
SELL! SELL!
Sell. Yes. Precisely. And then a few days later, this same sophisticated person says, (calmly and pleasantly) “You know, I think things are going rather well.” And everybody says, “You know actually I think I agree with you.” “You know, I think we’re rich.” “We’re rich.” “Yes!”
Rich! Yes! BUY, BUY, BUY!
BUY, BUY, BUY! Yes. And that is what we call market sentiment.
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Kudos to The Liberty Voice for the transcript.
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