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07-Feb-2005

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Getting Rich--a No Brainer?, Science Now
 









Excerpts:     Zero intelligence. A new model suggests that decisions of stock
market traders have little effect on the market. Credit:
Henny?Ray?Abrams/Reuters     The intelligence of stock traders may have no
effect on the market  The stock market works like a frenetic, two-way auction,
with buyers and sellers simultaneously placing bids. Modern economists imagine
that stock market traders are intelligent and make their bids based on what they
think a stock is worth. The volatility of the market--how big the jumps in price
get--should be based on the amount of information the traders hear, goes the
reasoning. More information means a jumpier market, as intelligent traders
analyze the news and shift their bids around to get the best deal.
Source: Getting Rich--a No Brainer?[
http://sciencenow.sciencemag.org/cgi/content/full/2005/201/4?etoc ], Kim
Krieger, Science Now, 05/02/01

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