March 26, 2018

Social Media and investments

Doug Kass talks about social media and its effects on investors.

Social media is where narcissism & centralized network effects collide, with the most catastrophic effects upon civilized society. Smart people have a problem, especially (although not only) when you put them in large groups. That problem is an ability to convincingly rationalize nearly anything... 
This explains how supposedly intelligent investors, fiduciaries, can rationalize buying negative interest rate paper, or buying TSLA tertiary equity distributions, in fiduciary accounts, or how insane monetary policies can be viewed as "normal" or without consequences. However, if we plow through all the extraneous BS, all the "smoke screen" nonsense passing for analysis or "logic", in effect simply "cut to the chase", then the fact that human nature NEVER changes makes market analysis much cleaner and much more like the "old", "outdated", human-based analysis. When it comes to "markets" nothing ever really changes, just the names, faces, and timing. Machines will greatly amplify and exaggerate the downside in much the same way they did the upside. The really interesting part will be watching the Central Bankers wrestle with that "genie" that escaped from their "bottle".

via twitter