Friday, June 29, 2007

Markets are Human!

Exuberance in the markets is a characteristic of a "crowd" which is trying to get ahead in a traffic jam, hence worsening the jam. There is a lack of calm and clarity in thought; just a mad rush.

To err is human! Unfortunately, markets are in the error mode for a long period of time, causing valuations of asset classes to be blown out of proportion.