Thought of the Day - Herd Mentality

75802-696695-thumbnail.jpgThe stock market should come with a sticker like this.  The market is supposed to be a rational environment isolated from the delusions of individuals by the weight of many.  However, on days like yesterday, that assertion is shown to be a fallacy.

What really happened yesterday to justify such a large correction?  If a disaster of some form occurs and there are reasonable expectations of economic hardships stemming from that event, then I can see a one day drop.  The market should not wake up one day and "find" a major issue that's taken months/years/decades to develop.  Groups should not have 'Oh Shit' moments.  But, evidently they do.  

(yes, I know the market dropped 'due to a decline in the stock market in Singapore'....but, why did that market decline? And if the market is so smart, why wasn't it known that the Singapore market was full of hooey?)

If I had the courage and a bit better idea where the leverage points were I would have thrown a bunch of cash into the market with the expectation that people will wake up today and say "What the heck!  Got a bit over excited yesterday...perhaps we overreacted."

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Next exciting stock market episode...'You trust those financial numbers why?'