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Market Psychology and Money
- Market psychology fluctuates significantly, impacting ups and downs.
- Money intensifies these fluctuations, driving manic participation or depressed avoidance.
Flawless to Hopeless
- Investors tend to ignore negatives during good times, interpreting everything positively.
- This continues until negatives become overwhelming, leading to a shift from "flawless" to "hopeless".
Efficient Market Hypothesis and Irrationality
- Howard Marks learned the efficient market hypothesis, which assumes rational investors, at the University of Chicago.
- He observes that investor irrationality leads to market swings.