ASEAN stock markets are thriving. But there is also fear, that it is heating to bubble point. From Wall Street Journal‘s “Market Watch” to Fox “Financial News” and many other, all have been making what they call: “Market Comment.”
- I fact, for the past week, ASEAN stock markets, were buffeted by a flood of “Market Comments.”
For the past 4 to 5 years, it seemed like everyone, have had doubts about the “Free Market” and “Capitalism.” And of course, when there is doubts about something, other factors seep in and take its place. And for the past 4 to 5 years, it was a tumultuous time for all who are involved with the economy. And for the past 4 to 5 year, a great deal of politics, philosophy, power, money, and a great many other factors, have seeped deep into the psyche of everyone & so the concept of “Neutrality” have literally been wiped out from people’s psyche.
And this include news organizations.
There have been a great deal of talk about how the market is not efficient. In fact, at the recent World Economic Forum, they also mentioned this fact, that the market is not efficient or rational.
- From the Wikipedia:
In finance, the efficient-market hypothesis (EMH) asserts that financial markets are “informationally efficient”. In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.
There are three major versions of the hypothesis: “weak”, “semi-strong”, and “strong”. The weak-form EMH claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information. The semi-strong-form EMH claims both that prices reflect all publicly available information and that prices instantly change to reflect new public information. The strong-form EMH additionally claims that prices instantly reflect even hidden or “insider” information.
Critics have blamed the belief in rational markets for much of the late-2000s financial crisis. In response, proponents of the hypothesis have stated that market efficiency does not mean having no uncertainty about the future, that market efficiency is a simplification of the world.
- But why is the market not efficient?
Lets take a look at one “Mechanics” of one system, of the “Free Market” being global reporters of the “Stock Market.”
Over the past few days, it was one critical juncture for the global stock market, as everyone who follows the global stock market closely knows. For me, as an observer of the global events, what I looked for, was “Market Behavior” because I need the information, for economic analysis, to better help me, allocate resources.
Those “Market Comments” were in fact, “Technical Analysis” and most of the “Market Comments” globally, said: “Resistance” at this or that point.
In fact, as I am Thailand based, my attention, therefore, is on Thailand and ASEAN, more than others. What I saw, was similar to what occurred globally and that is all day yesterday, in Thailand from news services, were literally, 10s of the so-called “Market Comments” on the Thai Stock Market, all of them, “Resistance” at this point and that point. The same is with some other ASEAN stock market.
There is a fine line, between “Market Comments” and “Market Editorial.” The market can accept, “Market Comments” from journalist now & then. But when it is too many, it becomes, “Market Editorial.”
What is “Market Editorial?” Well “Market Editorial” is “Market Manipulation.”
Most sophisticated investor, can accept, bearish or bullish or neutral outlook of the market, when it comes from market participants. Everyone, is trying to make some money from the markets, fighting & struggling, all sides, all participants, battling with their wit. And according to “Capitalism” that battling, increases “Market Efficiency.” And the market, will be the one that allocate the resources.
In sum, what the market can not accept, is journalist and reporters, who are there to increase “Market Efficiency” by linking market participants, to the market, but instead “INTERJECTING” their opinion onto the market, with “Market Comments” that are in fact, “Market Manipulation.”
If Davos is concerned about “Inefficient Market Allocation” all they have to do, is look at how journalist and reporters globally, behaved for the past few days.
- Competitiveness: Global Stock Market Reporter’s “Market Comments” Editorial & Manipulation (thaiintelligentnews.wordpress.com)
- Markets are Random – – Get Over It! (401kplanadvisors.com)
- A Kid’s Education in the Stock Market! (optionsanimal.com)
- Thailand’s whiskey tycoon branches out (bbc.co.uk)
- Debunking Economics, Part XIII: Alternatives to the EMH (unlearningeconomics.wordpress.com)
- Stocks Markets That Flummox Masses Do No One Any Good (bloomberg.com)
- Efficient markets: paradox or red herring? (stumblingandmumbling.typepad.com)
- Anthony Hilton: Fixing a system that just isn’t working (standard.co.uk)
- What’s really moving the stock market? Obama, Romney, and the Presidential Election (optionsanimal.com)