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  3. Economists believe that investors are rational, and that stock prices are therefore unpredictable. It sounds peculiar, but the l

Economists believe that investors are rational, and that stock prices are therefore unpredictable. It sounds peculiar, but the l

admin2009-06-24  57
问题     Economists believe that investors are rational, and that stock prices are therefore unpredictable. It sounds peculiar, but the logic is ironclad.
    Rational investors would take into account everything they know when buying or selling stock—all the information available about where profits, interest rates, technology and so on are going. So stock prices would reflect all available knowledge, and would change only when new information came in. And new information is, by definition, unpredictable, which means that changes in stock prices would be unpredictable, too. But investors, being human, are driven by fear, greed and the madness of crowds.
    In principle this should create patterns in stock prices, and in principle you can use those patterns to outperform the market. But while it may be very hard to tell, whether the market is overvalued or undervalued, one thing is for sure: It fluctuates more than it should. That is, instead of rising or falling only when there is real news about future, stocks surge and plunge for no good reason.
    People sell because other people are selling, or buy because other people are buying. And, as a result, it is more a series of random leaps than a random walk. Tuesday was a case in point. On a slow news day, markets suddenly dived, with the Dow falling by more than 3 percent and the Nasdaq by more than 5 without anything happening to change your fundamental view about what is on in the U.S. economy. Why was the market so easily spooked? Presumably because everyone is even more confused than usual about what stocks are really those days.
    On one side, the U.S. economy has been wallowing in good news. Productivity has been soaring, allowing the economy to grow far faster than seemed possible. And with clever new applications of silicon chips coming out every day, it is easy to become exuberant about the future. On the other hand, as any financial theorist could tell you, good news that you already expect to hear isn’t news. Five years ago, a 2 percent annual increase in worker productivity would have been regarded as excellent, and stocks would have risen sharply. Today it would be regarded as a disappointing performance, and would drive stocks down.
    So, is it terrific or incredible? Nobody really knows. And a rational market would accept this ignorance, and wait for some actual evidence in favor of one side or the other.
    Of course, it doesn’t work that way. One Tuesday, something caused investors to become slightly less convinced than they had been the day before that we are living in the best of all possible world. And the result was a huge destruction of paper-virtual-wealth.
选项 A、investors are not always rational
B、stock price reflects all available knowledge
C、a rational investor should be good in prediction of the market
D、because new information is unprediction it is hard for investors to be rational
答案A
解析
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