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How Wall Street Is Like a Guitar String
(Business 2.0) – Lev Muchnik and Sorin Solomon, theoretical physicists at Hebrew University, have observed that graphical representations of stock-trading patterns sometimes resemble the sonogram of a plucked guitar string. During a panic, traders exaggerate the perceived distance between the current price and the "right" price, creating wild oscillations that are eventually dampened by the market's natural resistance to excessive trading. Conclusion: When Wall Street gets hairy, go home and bang out some power chords. It's cheaper, and the results look about the same--at least on an oscilloscope. --MARK FRAUENFELDER |
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