When The Beatles appeared on The Ed Sullivan Show in 1964, I was 10 years old. My classmates were gaga over the Beatles, but I thought the music was, well, childish, especially “I Want to Hold Your Hand.” My parents played classical and Broadway music at home so early Beatles didn’t impress me.
But a lot of people were impressed. Why? Maybe information cascades.
**What the Beatles Tell Us About Fame** **by David Brooks, The New York Times, Feb. 10, 2022**
**...** **So how did the Beatles make it? Obviously, they had talent that was going unrecognized. But they had something else: early champions...**
**Cass Sunstein is a celebrated Harvard Law professor who studies, among many other things, how informational cascades work.... People don’t rely only on their own judgments; they think in social networks. We use informed others in our network to filter the mass of cultural products that are out there. If a highly confident member of your group thinks something is cool, you’ll be more likely to think it’s cool. ..<snip experiment that shows this>...** [end quote]
Information cascades are so well-known in investing that “pump and dump” is only one description. Information cascades can develop in a group of like-minded people (like METAR), causing us to overlook alternate explanations and opportunities.
That is why it’s so important to encourage every METAR to explain their own investment strategies and tactics, especially the ones that don’t agree! We all have our own personal risk tolerance and life situation, but seeing alternative investing approaches may add arrows to our quiver.
The thing the Beatles did throughout was make music to hum to. That was their information cascade.
Yoko was in NYC five months before she met John. She was composing far more complicated totally inaccessible atonal jazz. No one cared. She was a far better composer technically than any of the Beatles.
Technical compositions in layman’s terms sucks.
Beethoven is famous for the subjects in some of his works. He is not know for his large number of academic pieces.
That is why it’s so important to encourage every METAR to explain their own investment strategies and tactics, especially the ones that don’t agree! We all have our own personal risk tolerance and life situation, but seeing alternative investing approaches may add arrows to our quiver.
I treasure the dissenting posts most of all, and though I certainly will fight for my POV until proven wrong, I do keep listening to the arguments and looking at the data. To me the hear hear posts are pretty useless, (though they do still make my heart happy,) as knowing the holes in my theories is the most helpful to avoid error.
It’s also why I prefer articles with comments on them. I tend to read the comments first so that I can read the article in a more critical manner, looking more strongly at the pros and cons of the articles as expressed in the comments. To me, feedback from people willing to tell the Emperor that he is wearing no clothes is one of the big benefits of the internet. Face to face you are too likely just to get a pat on the back and criticism behind the back. Most are too socially concerned about criticizing your thoughts to your face.
Information cascades are so well-known in investing that “pump and dump” is only one description. Information cascades can develop in a group of like-minded people (like METAR), causing us to overlook alternate explanations and opportunities.
This should be reposted on Saul’s board and the paid-access UPST board in particular. The caterwauling over the price drop in UPST (and other hypergrowth stocks) has turned into accusatory gas-lighting of TMF’s “timely buy” recommendation as “pump and dump”, published unfortunately near UPST’s top before the hypergrowth bubble collapsed.