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Wizards in Pork Pie Hats


Are the wizards of Wall Street smarter than the average bear?

The most visible symbol of financial problems seems to be the falling stock market. But all those companies in those indexes are the same ones that were there a month ago, and are still healthy and making money. The fall in the markets does not represent and change in the current health of industrial America. The lower prices reflect a changing expectation about those company's future prospects, but the folks driving the market are just guessing, and really, their guesses aren't really any better than yours or mine.

Similar expectations drove oil up to $145 and now back down under $80. Wall Streeters work really hard to portray themselves as smarter than you or I, but they are not. I went to school with them. I know these guys. They aren't smarter, and they aren't any less susceptible to panic. In fact, because they are often highly leveraged and are worried about making payments on that new Jaguar they just bought for their mistress, they tend to be more easily stampeded.