Japan stocks rebound sharply after worst rout in history | Hacker News Reader

Japan stocks rebound sharply after worst rout in history

cnn.com

21 pointsharambae15 comments

Shocking that fear and greed are the two primary factors in our global economy.

Except the vast majority of trades are done by algorithms who know no fear or greed.

I would argue that these market movements themselves have very little to do with human emotion.

Now the policy changes (higher or lower interest rates) that trigger certain trading however... Maybe that's what you meant? Even there you could argue that those decisions are not made on a whim nor are they based mostly on fear or greed.

Now if we go one step closer to the root cause: (global) government over-spending for decades and insane risk taking in terms of self regulating financial markets (US). Now we're talking fear and greed, yes...

These algorithms are largely reactive. When humans panic and start selling all their stock, the algorithms react in kind and exacerbate the problem. So while these algorithms have no feelings, I think it's wrong to say they "have very little to do with human emotion."

Algorithms are written by humans. They’ll have human bias just the same as traders making trades manually.

With short selling you only need greed.

There’s no difference in going long or being short.

Both have the hope that your profit turns into a bigger profit and the fear that your loss could turn into a bigger loss.

>> There’s no difference in going long or being short.

When you're long, the maximum potential loss is your total investment. When you're short, the maximum potential loss is infinite.

Thanks. I should have added that I was talking strictly about emotions.

Actually, with insurance prediction models, the planning horizon for a algorithmically driven economy is quite higher then it used to be. It just discards human suffering involved while the world the business giants traverse changes.

Now if there is "human non reality based optimism" and data-driven reality based pessimism, drifting into one another in a continental shift and the Algos predict a "Big One" correction. Then they get jumpy.

Public equity markets are a brilliant invention that makes us more prosperous. Sometimes there's volatility. So what.

I think this quote says it all: "Importantly: Fundamentals are sound, the economy is doing fine, there is no evidence of abandoning Japanese equities.”

If fundamentals are sound, the economy is fine and people keep their Japanese equity, then what was that crash about?

The central bank raised interest rates.

Why is this shocking?

Fear, greed, hope, etc. are found in all things built by humans.

I thought it was obvious but I should have added a `/s` to my comment.

I see, thanks. It was not obvious as comments like yours are found all over HN without the sarcasm.

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