• What do prices know that we don't?
    12 replies, posted
[media]http://www.youtube.com/watch?v=WPy-QKXofQs[/media]
Basically how i got muh knife in CS:GO
While the basic knowledge makes sense in a fully capitalist libertarian society, we don't live in one. This video assumes that there isn't market price fixing, there isn't large government subsidies, and there isn't massive price fluctuations during the time that you are "growing your crop".
[QUOTE=OogalaBoogal;46679397]This video assumes that there isn't ... massive price fluctuations during the time that you are "growing your crop".[/QUOTE] that's why he sold futures
[QUOTE=hydrated;46679442]that's why he sold futures[/QUOTE] Yeah, but would that be good for everyone or just him?
[QUOTE=SamPerson123;46679451]Yeah, but would that be good for everyone or just him?[/QUOTE] pretty much all crops are bought and sold on futures as is. sometimes it's good for everyone, sometimes it's good for the farmer.
Yeah because when housing prices go way up it means the houses are definitely worth that much
so what i'm getting from this video is an analogy for markets as a whole to be used outside of just farming, which is saying to focus on current prices and not look at historical figures and trends and to more or less invest in what is good now because you can't have "perfect information" this is retarded and doesn't apply to a majority of markets. while perfect information isn't possible, historical information that is readily and easily available all over the internet can be (and regularly is) used to determine the expected trend of a market. this guy is saying fuck all that and invest in the heat of the moment (3:58 onwards) there's a shit ton of reasons that the price of something can rise, and if you blindly invest in something just because the price is rising chances are you're going to lose out. "trust in the price" is a horrible suggestion. for example prices could be rising on a particular stock due to the expected announcement of a CEO retiring or stepping down, which as soon as that announcement is made the price is going to drop. if you blindly just invest because the price is rising, next thing you know the price takes a sudden dive over the course of a few hours and you're shit out of luck
Let's look at what else this channel has uploaded [IMG]http://puu.sh/dogS9/7be2904544.jpg[/IMG][IMG]http://puu.sh/dogWo/ffe187d6c4.jpg[/IMG][IMG]http://puu.sh/doh4S/f2734f13b4.jpg[/IMG] Ayn Rand, Anti Min-Wage, and That One Fucking FPS That Used to be Good Before Updates Bloated it. Nothing to see here, folks. [editline]10th December 2014[/editline] Hehe, this channel DOES have some value in it though, but seriously.
Video offers a really specific and simplified example. It applies more to business practices then consumers. If people ignore the "cost" behind the prices then it leads to big issues. Natural Gas is cheap? Better tell my electric company to build more plants, nevermind the taxes that haven't yet been applied to the industry and the environmental damage. Bananas are 30c each? Sounds like its time for fruit smoothies while the South American farmers are exposed to pesticides that causes sterility and make about $10,000 a year at best. It doesn't matter how or when but you should at some point know the effects of your business or consumer habits.
[QUOTE=certified;46679983]Let's look at what else this channel has uploaded [IMG]http://puu.sh/dogS9/7be2904544.jpg[/IMG][IMG]http://puu.sh/dogWo/ffe187d6c4.jpg[/IMG][IMG]http://puu.sh/doh4S/f2734f13b4.jpg[/IMG] Ayn Rand, Anti Min-Wage, and That One Fucking FPS That Used to be Good Before Updates Bloated it. Nothing to see here, folks. [editline]10th December 2014[/editline] Hehe, this channel DOES have some value in it though, but seriously.[/QUOTE] The problem is they're trying to over simplify things that don't [I]need[/I] to be more simplified than they already are. Every day people don't need to understand the idea of prices in terms of markets and stocks and industries, and the people that do (like farmers in this example) shouldn't have a problem understanding the information that is already there. It's not hard to see the shift in consumer demand due to things like droughts in one high-production area and increase in demand in another. If you're a farmer producing goods on 500 acres of land, i would hope to fuck that you can at least read some news articles and draw some simple conclusions. Simplifying it down to "just look at the price" is not necessary and is actually horrible advice which would cause more problems than someone having to do [B]minimal[/B] research into the demands of their goods. You don't look at just the price - you look at the price in conjunction with recent events, past trends and future opportunities. This video makes it seem like the information to do that is impossible to understand when it's really not.
The video applies perfectly well to consumption goods. Obviously speculative goods like real estate are much more complicated and prone to bad psychology (i.e. housing bubble).
[QUOTE=certified;46679983]Let's look at what else this channel has uploaded [IMG]http://puu.sh/dogS9/7be2904544.jpg[/IMG][IMG]http://puu.sh/dogWo/ffe187d6c4.jpg[/IMG][IMG]http://puu.sh/doh4S/f2734f13b4.jpg[/IMG] Ayn Rand, Anti Min-Wage, and That One Fucking FPS That Used to be Good Before Updates Bloated it. Nothing to see here, folks. [editline]10th December 2014[/editline] Hehe, this channel DOES have some value in it though, but seriously.[/QUOTE] The video game violence video is actually pretty solid, not that you actually watched it of course.
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