Skip to content

The Influencial Investor

I just read a great article on the role of the massive fall in investor confidence on the current economic crisis. The article discusses the ways in which the quantitative models for risk developed by financial engineers failed to account for the liquidity risk generated by widespread investor panic following the initial bail out in October of 2008.

Financial contagion has often been discussed in relation to investment in emerging nations; countries increase their willingness to invest when they see other nations doing so and withdraw funding based on the actions of other nations. However, it is quickly becoming clear that similar behavior can occur on a more micro-sphere as investors use their peers as benchmarks in making decisions about where to focus their investment.

Share

Posted in Business, Investing, Psychology. Tagged with , , , .

By Yael Davidowitz-Neu
09/13/2009

14 comments

14 Responses

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.

  1. mdawg said
    on 09/16/2009

    Most traders are guys. If we think about the way men operate in groups, we could come to the same conclusion with just about anything. Just picture one guy going SELL SELL SELL! What do you think everyone else is doing? yet another great example of behavior economics and how everyone failed to see its affect on our current economic state!

  2. rosostrov.ru said
    on 09/25/2009

    good points covered james.adrian

  3. Rapidshare Down said
    on 11/17/2009

    important information. It’s really useful. Thanks

  4. betfair tactics said
    on 12/27/2009

    Good article. Very well written

  5. forma said
    on 02/17/2010

    It was a very interesting post thanks for writing it!

  6. Larry said
    on 03/26/2010

    I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the fantastic work Look forward to reading more from you in the future.

  7. יבואן said
    on 04/03/2010

    רוצה ליבא בסין פשוט וקל בלי בעייה יבוא מהיר מסין  שילוח ואיתור של מוצר  בסין נוכל לעשות בשבילך הכל בסין כל השירותים העסקיים עסקים בסין בקלות ייצוג בקנטון פייר -1888-

  8. Amy said
    on 04/23/2010

    good points covered james.adrian

  9. Rob said
    on 04/27/2010

    It was a very interesting post thanks for writing it!

  10. Simon said
    on 04/27/2010

    important information. It’s really useful. Thanks

  11. Tony said
    on 04/28/2010

    I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the fantastic work Look forward to reading more from you in the future.

  12. Bruce said
    on 05/21/2010

    I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the fantastic work Look forward to reading more from you in the future.

  13. Amy said
    on 06/04/2010

    important information. It’s really useful. Thanks

  14. booster car seats said
    on 09/12/2010

    Thank you very much for that superb article

Some HTML is OK

(required)

(required, but never shared)

or, reply to this post via trackback.