The current stock market crash resulted, say analysts, from the interplay between the Bull and Bear markets, the sub-prime crisis in America and the slowing down of growth in the global economy. All true, I guess. But the simple explanation for the stock market crash is that investors behave like sheep.
A few years ago some brave mathematicians at the Mediterranean Institute for Advanced Study in Mallorca used mathematical models of flocking behaviour to show that investors behave like sheep. But you don’t need mathematicians to verify the sheep-like behaviour of investors. It’s bleating obvious!
Everyday you hear, tagged onto the end of the radio or TV news, that some stock market index that sounds like the Nasquack has risen three points, that the Hang Long has suffered its greatest fall since 2pm yesterday or that the Footski has gone capute-ski. You don’t have to be an expert to realise that the stock market has more ups and downs than a leading zip fastener in Desperate Housewives.
Full Article: They Call It the Stock Market