What Is The Relationship Between Smart Investors And Sandpile Theory?

What is the relationship between < p > smart < a href= "http://www.91se91.com/news/index_s.asp" > investor < /a > and sandpile theory?

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In the stock market, when the smart investors sharply reduced and the market followers increased significantly, the slope of the sand pile gradually increased. When the P increased to the point that it could not rise, then it collapsed "sooner or later."

Smart investors often choose to evacuate when the sandpile is increasing. When they leave, it means that the risk of market collapse is coming.

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< p > Why did the stock market fall sharply on the day of smart investors' withdrawal? For this phenomenon, F Barker (Per Bak) had made an ingenious explanation.

This Danish physicist is fascinated by the stock market. He co authored a paper on the price fluctuation of diversified stock market with his two colleagues.

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< p > in this article, Barker divides traders into two categories: noise traders and rational traders.

Noise traders, or market followers, try to profit from changes in the market. They either buy when the stock price rises or sell when the stock price falls.

Rational traders, smart investors, do not buy and sell stocks in the direction of price changes, but buy and sell stocks based on the relationship between the price of securities and their intrinsic value. If the value of securities is higher than the current price, they will buy, otherwise they will sell.

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< p > most of the time, the influence between them is balanced, and there is no obvious change in buying and selling behavior in the market.

But when share prices rise, the proportion of market followers will start to rise. As the stock price continues to rise, many smart investors will decide to throw stocks and leave the market.

Instead, a large number of market followers are attracted by the rising share price to the stock market.

When the number of smart investors is relatively small, the stock market bubble has emerged.

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< p > in order to illustrate this phenomenon vividly, Buck uses the ingenious metaphor of "sand pile".

When the sand falls from one instrument to another on a large platform, the sand is spread on the table and then forms a small pile.

As a grain of sand falls on another grain of sand, the more it piles up, the higher the sand pile, until it forms a slope on every side.

In the end, the pile of sand can no longer rise.

At this time, if the sand continues to fall on the sand pile, the sand will slide down the slope, and its speed will be equal to that of the falling sand. When the sand grains are on the side of the sand pile, this is called "collapse".

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< p > if the falling sand drops in a smooth place, it will stop, otherwise it will continue to fall down, and it may also hit other unstable sand grains, causing more sand to slip.

The collapse will stop only when the unstable grains can move far and how far they move.

This is the theory of "sand pile" collapse.

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< p > < < a href= > http://www.91se91.com/news/index_c.asp > stock > /a > market. When smart investors reduce sharply and market followers increase a lot, the slope of sand pile is gradually increasing. When it comes to the fact that it can not rise, then it will collapse sooner or later.

Smart investors often choose to evacuate when the sandpile is increasing. When they leave, it means that the risk of market collapse is coming.

It seems that as long as smart investors send out signs of withdrawal, we should consider them as a warning.

If you do not sell, you must make sure that you do not buy it.

A high level of vigilance and a clear understanding of risk is one of the core factors of success.

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< p > it is very difficult to stick to the ups and downs of the < a href= "http://www.91se91.com/news/index_s.asp" > market < /a > and the holding of the mob.

But Diderot said, knowing what things should be, showing you are smart people, knowing what things actually are, showing you are experienced people, knowing how to make things better, that you are talented people.

I know that the difference between great investors and good investors is not in knowledge or intelligence, but in the way they behave.

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