Stonks!

“Mr Market is kind of a drunken psycho. Some days he gets very enthused; some days, he gets very depressed. And when he gets really enthused, you sell to him, and if he gets depressed, you buy from him. There’s no moral taint attached to that.”- Warren Buffett.

Stock markets are one of the world’s most “perplexing” places. You might be wondering why!

Well, the answer is that when someone buys a stock in the expectation that the stock might climb, the other person sells the stock at the same price with the expectation that the stock will probably decline. 

Psychologists baffled by this anomaly have long been researching “behavioural economics” and are now convinced that the stock markets are nothing but a “psychological sensation”. 

Robert Shiller found that the Efficient market hypothesis doesn’t justify the price movements in the market. According to him:

The excess volatility can be a…