My first, and perhaps only introduction, to this line of thinking was introduced by George Soros, the multi-billion dollar hedge fund manager, donor, and investor, in his book The Alchemy of Finance. If you watched Wall Street, Gordon Gekko notes that value is a perception, and the perception becomes real. If this true, despite the inherent value of something, the future outcome depends on people's expecations now. It is linked.
Put as an example in economic terms...
Let's say that today, the markets are perceived to be bullish. Despite moderate interest rates, the Fed has halted future increases for the time being, energy rates have fallen, and the spin-machine known as the Economic Indicators, all portend good things to come. It even measures minor increases in income, jobs, labor, housing starts, new homes sales, etc. Depending on the indicator it CAN be bullish or bearish. But in reality what will make or break the future value of something is people's perceptions of the future, and therefore their reaction TODAY. So if Microsoft is expected to release a revolutionary new software, on top of Halo 3 which should be wildly successful, and expecations are that their profit will be good, whether it is today or not, people will spend money on microsoft AND their stock, driving the price up. Concurrently, the positive expectations regarding the economy, will drive consumers to spend money, increasing sales and earnings, whereby value will come close to price.
In an opposite, view, regardless if the values of companies are low, their values today are related to what they will do in the future. Not now. The market is said to be LEADING ECONOMIC INDICATOR, because it tends to look ahead 9-12 months. But more importantly, it's the berage of economic data and performance of the stock market that actually drives itself and the value of companies, regardless if it makes sense or not. Just look at the DOTCOM bubble. The view then, was that websites would take over the world, that a new information economy was emerging, and as a result, stock prices were pushed ahead, with few companies increasing earnings. However, it was merely EXPECTATIONS that pushed some stocks ahead. Others, never moved at all, because they really had no market for their business, just an idea.
As we sit here today, the Collective Expectation will inevitably be what drices us forward and dictates actions today. If people perceive North Korea as testing Nukes to begin World War III, then we will take action NOW to prevent that. Unfortunately that might be the PRECISE action that precipitates World War III. This is also known as a self-fulfilling prophecy. People have a certain "belief" on future life, as a result, they act NOW in accordance with perceptions THEN, even though ANY forward thinking is not real AT all.
The same might apply to the PAST, regardless if it's a good idea or not. When you see a stock, perceived value might be twice as high as the current price, and the other fundamental indicators might indicate a solid value, but keep in mind, the current value reflects expectations 9-12 months out with the evaluation being seen today. (Or the Present Value of Future Expectations). This isn't the EFFICIENT market theory at all, since it's quite INEFFICIENT. It's investing, and living based on irrationality and emotion and some bits of fear, but it's quite often how it's done.
You Could buy Apple now, and based on NOW, they're doing well, but if people, the collectiveness of society, perceives more wage cuts, more layoffs, higher interest payments, and taxes, then spending subsides. Eventually discretionary income falls, and apple makes less money because nobody is buying computers, content, and IPODS. And the only driver is FUTURE expectations of a person's performance. A consumer won't buy a $300 device, if they think they won't have a job soon, or they will have a mortgage that is $300 per month higher THEN, than it is now. As a result, the future perception comes to light TODAY.
This is only one theory on investing, and life, but it encompasses many twists of human behaviorial psychology. It's also a reason economic reports are used. They are a nice measure of financial and economic data, but spinning these reports in the news, although most of the US population has never taken an economic or finance class is mostly about spinning perception toward what people WILL or won't do. In turn, the great institutions of which 70-80% of all trading is done through make moves based on what the public does. Society is merely a machine, which forms the basis for the economy. From conception @ birth, you're given a Social Security number, with which EVERYTHING is tied to; it's a profile of you as an economic unit, and without it, you can't live here. The SSN# is akin to when Morpheus displayed the battery to Neo and demonstrated, truly, what people were to the 'system'. This isn't to say it's good or bad. It is as it exists until everybody awakens, or nobody does. But you should be aware of how it exists, because like reality, it operates on the basis of certain laws, with a certain purpose.
You can also see this theory in play in your own life. Those who think they're not worthy of something, won't act. Those who do, will. If you think you're worthy of certain hot women, you'll do NOW what it takes to get them. If you think you're worthy and capable of developing a great body, you will achieve it NOW, by eating right, lifting, and constantly researching nutrition and health information. When Henry Ford Stated that "whether you think you can or you can't, you're right," he was obviously right, as he perfectly displayed throughout his entire life.
Right now we stand waging a massive war, mounting debt, the potential for rising tax rates, the collapse of the Social Security System, a rising stock market, and so many more different perceptions all at play. Everything viewable on the world screen is the result of human perception and consciousness at play, played out on the world map. Whatever you belief, or desire, will come to fruition, if enough people, energy, emotion, and passion are provided, whether wanted or unwanted. As it is, we have a Socialist government because people find it more difficult to build themselves up, deal with the truth, and would prefer being lazy, over being educated, informed, stable, logical, tough-minded, self-sufficient, and independent. This isn't a knock on the gov., because the collective consciousness of society ASKS for it by their acquiescent obedience. They ASK, but never do. They talk, but never walk the talk.
A-Unit
Put as an example in economic terms...
Let's say that today, the markets are perceived to be bullish. Despite moderate interest rates, the Fed has halted future increases for the time being, energy rates have fallen, and the spin-machine known as the Economic Indicators, all portend good things to come. It even measures minor increases in income, jobs, labor, housing starts, new homes sales, etc. Depending on the indicator it CAN be bullish or bearish. But in reality what will make or break the future value of something is people's perceptions of the future, and therefore their reaction TODAY. So if Microsoft is expected to release a revolutionary new software, on top of Halo 3 which should be wildly successful, and expecations are that their profit will be good, whether it is today or not, people will spend money on microsoft AND their stock, driving the price up. Concurrently, the positive expectations regarding the economy, will drive consumers to spend money, increasing sales and earnings, whereby value will come close to price.
In an opposite, view, regardless if the values of companies are low, their values today are related to what they will do in the future. Not now. The market is said to be LEADING ECONOMIC INDICATOR, because it tends to look ahead 9-12 months. But more importantly, it's the berage of economic data and performance of the stock market that actually drives itself and the value of companies, regardless if it makes sense or not. Just look at the DOTCOM bubble. The view then, was that websites would take over the world, that a new information economy was emerging, and as a result, stock prices were pushed ahead, with few companies increasing earnings. However, it was merely EXPECTATIONS that pushed some stocks ahead. Others, never moved at all, because they really had no market for their business, just an idea.
As we sit here today, the Collective Expectation will inevitably be what drices us forward and dictates actions today. If people perceive North Korea as testing Nukes to begin World War III, then we will take action NOW to prevent that. Unfortunately that might be the PRECISE action that precipitates World War III. This is also known as a self-fulfilling prophecy. People have a certain "belief" on future life, as a result, they act NOW in accordance with perceptions THEN, even though ANY forward thinking is not real AT all.
The same might apply to the PAST, regardless if it's a good idea or not. When you see a stock, perceived value might be twice as high as the current price, and the other fundamental indicators might indicate a solid value, but keep in mind, the current value reflects expectations 9-12 months out with the evaluation being seen today. (Or the Present Value of Future Expectations). This isn't the EFFICIENT market theory at all, since it's quite INEFFICIENT. It's investing, and living based on irrationality and emotion and some bits of fear, but it's quite often how it's done.
You Could buy Apple now, and based on NOW, they're doing well, but if people, the collectiveness of society, perceives more wage cuts, more layoffs, higher interest payments, and taxes, then spending subsides. Eventually discretionary income falls, and apple makes less money because nobody is buying computers, content, and IPODS. And the only driver is FUTURE expectations of a person's performance. A consumer won't buy a $300 device, if they think they won't have a job soon, or they will have a mortgage that is $300 per month higher THEN, than it is now. As a result, the future perception comes to light TODAY.
This is only one theory on investing, and life, but it encompasses many twists of human behaviorial psychology. It's also a reason economic reports are used. They are a nice measure of financial and economic data, but spinning these reports in the news, although most of the US population has never taken an economic or finance class is mostly about spinning perception toward what people WILL or won't do. In turn, the great institutions of which 70-80% of all trading is done through make moves based on what the public does. Society is merely a machine, which forms the basis for the economy. From conception @ birth, you're given a Social Security number, with which EVERYTHING is tied to; it's a profile of you as an economic unit, and without it, you can't live here. The SSN# is akin to when Morpheus displayed the battery to Neo and demonstrated, truly, what people were to the 'system'. This isn't to say it's good or bad. It is as it exists until everybody awakens, or nobody does. But you should be aware of how it exists, because like reality, it operates on the basis of certain laws, with a certain purpose.
You can also see this theory in play in your own life. Those who think they're not worthy of something, won't act. Those who do, will. If you think you're worthy of certain hot women, you'll do NOW what it takes to get them. If you think you're worthy and capable of developing a great body, you will achieve it NOW, by eating right, lifting, and constantly researching nutrition and health information. When Henry Ford Stated that "whether you think you can or you can't, you're right," he was obviously right, as he perfectly displayed throughout his entire life.
Right now we stand waging a massive war, mounting debt, the potential for rising tax rates, the collapse of the Social Security System, a rising stock market, and so many more different perceptions all at play. Everything viewable on the world screen is the result of human perception and consciousness at play, played out on the world map. Whatever you belief, or desire, will come to fruition, if enough people, energy, emotion, and passion are provided, whether wanted or unwanted. As it is, we have a Socialist government because people find it more difficult to build themselves up, deal with the truth, and would prefer being lazy, over being educated, informed, stable, logical, tough-minded, self-sufficient, and independent. This isn't a knock on the gov., because the collective consciousness of society ASKS for it by their acquiescent obedience. They ASK, but never do. They talk, but never walk the talk.
A-Unit
