Quote for the Week
What the economists call fabrication or demand in use is inversely correlated with price. Or, more simply, you know, if gasoline prices go up, other things equal, you’re going to drive less. So price and demand are inversely correlated: basic economics. And that’s the way it is for things that are used. But in financial markets, it isn’t the case. That actually, demand is positively correlated with price. More people buy things when they go up; if stocks start to go up, more people want them than if they’re going down. The higher they go up, the greater the demand for them. That’s why you see people chasing mutual fund performance; it’s why you see the bubbles that you saw in technology and Internet stocks where all the money flowed in after they’d gone up a lot… It’s been very well established that demand follows price. — Bill Miller (source)
From the Archives
Last Call
- Fear Not – The Better Letter
- Information That Would Get Your Attention – M. Housel
- Data Update 3 for 2024: A Rule-breaking Year for Interest Rates – Musings on Markets
- Want to Understand Human Behavior? Study Physics – Finding Joy
- What Is Intellectual Humility? (podcast) – JSTOR Daily
- Intellectual Humility: Foundations and Key Concepts – JSTOR Daily
- The Myth of Technological Inevitability – Future, Now and Then
- How Much of the World Is it Possible to Model? – New Yorker
- Hippy, Capitalist, Guru, Grocer: The Forgotten Genius Who Changed British Food – Guardian