THE MARKET IS MORE THAN A STATE OF MIND
No one would deny the importance of psychology in the marketplace. But many market-participants, and surely all economists, would stop far short of giving ‘psychological factors’ the lead role in a history of price movements. Arthur Miller’s quip that ‘the market represents nothing but a state of mind’, and that stock market speculators ‘believe that nothing is real; that if it is Monday and you want it to be Friday, and enough people can be made to believe it is Friday – then by God it is Friday’, was aimed at a theatre audience. The successful investor, however, with a long track record realizes that there can be no short cut which excludes the process of ‘value-assessment’. Political and economic projections cast in the form of alternative scenarios with attached probabilities of occurrence are indispensable.