Professor Elam

Thursday April 3, 2014

I often discuss the reality and impact of social mood. Social mood causes stock and bond prices to vary literaly from minute to minute and certainly from month to month. The animal kingdom provides examples of this via schools of fish or flocks of birds.

Here is a video of hundreds of starlings flying in a defined formation. Now, does one bird make the decision of where to fly, land, turn, or is this a collective of all the birds?  Do a few birds in front make the decision?  One can clearly see the flock changing direction, but how does that come about?

I have demonstrated in class with various stocks that mood will be positive, as in buying RAX right up to $80, and then the mood changes dramatically and everyone begins selling. 

The answers to such questions will help analyze everything from political races to popular music and fashion trends.