Irrational Markets Quotes & Sayings

In real markets, agents make bad choices. They are often ignorant, misinformed, and irrational. Yet, markets tend to punish agents for making bad choices, and they tend to learn from their mistakes. For instance, if you fail to pay your bills, your credit rating declines and you have a harder time getting loans. If you fail to do research and buy an unreliable car, you suffer from repair bills. In contrast, when people in government make bad choices, the political process almost never punishes them. Studies show that voters are terrible at retrospective voting - they do not know whom to blame for bad government - and so politicians are not punished for making bad choices. — Jason Brennan

Trading has taught me not to take the conventional wisdom for granted. What money I made in trading is testimony to the fact that the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I've learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they're almost always wrong. — Richard Dennis

If you've ever taken an economics course you know that markets are supposed to be based on informed consumers making rational choices. I don't have to tell you, that's not what's done. If advertisers lived by market principles then some enterprise, say, General Motors, would put on a brief announcement of their products and their properties, along with comments by Consumer Reports magazine so you could make a judgment about it.

That's not what an ad for a car is - an ad for a car is a football hero, an actress, the car doing some crazy thing like going up a mountain or something. If you've ever turned on your television set, you know that hundreds of millions of dollars are spent to try to create uninformed consumers who will make irrational choices - that's what advertising is. — Noam Chomsky

I started in business journalism from the outside, so when I started writing about markets and business, I was struck by the fact that markets seemed to work well even though people are often irrational, lack good information and are not perfect in the way they think about decisions. — James Surowiecki

The market system makes self interest into something thoroughly virtuous.' This is the extraordinary feature of markets: just as they can turn many individually irrational individuals into a collectively rational outcome, so they can turn many individually selfish motives into a collectively kind result. — Matt Ridley

Markets can remain irrational longer than you can remain solvent. — John Maynard Keynes

It's a funny thing, by the way, how people who love free markets are also quite sure that they know that investors are being irrational. — Paul Krugman