How many people believe that the collective Investor community is a rational body of clear-thinking individuals? In trying to bring a false sense of order to the situation, events such as the otherwise "insane" acquisition of WhatsApp by Facebook are neatly explained. It's not a game-changer that just took place before our eyes, trumping everything we know that's taught in business programs, but rather the consequence of meaningful thought that any other respectable company would have made. The subsequent rise of FB stock, of course, is the consequence of a rational panel of people who weigh the pros and cons of every earnings announcement, acquisition, and general consequential business decisions that their CEO and board make.
It would both spare journalists from looking outdated and simply reflect more journalistic integrity for them to just say that "the stock reacted this way," without assuming that the reaction was the deterministic result of a certain collective process of reasoning.
This brings up another issue that's been bugging me lately: the idea that compensation- whether we're talking about CEO pay or the ludicrous compensations to university officials who directly benefit from their respective college's sports success - is also rational and "deserved." I think "free market" advocates have led us to believe that everything that currently exists was meant to be, as that's what the free market dictated.
The fact of the matter is that journalists have been deceived into this kind of thinking - they tend to ditch all hints of things either being rigged or being highly influenced by favoritism/nepotism/politics. One could make that case that perhaps human plots and natural biases are also part of the free market - that even the most government-regulated industries are where they are due to free-market events. Or that a dictatorship came about due to free-market forces.
On that note, perhaps journalists are simply acting on free-market principles themselves! In this case it might be more about survival, where putting an otherwise multivariate problem into a neat, structured package gives them more immediate visibility, an heir of competence, and career security. The same might be said of "ignorant country folk," who often tend to define the world in clear shapes and limited realities that seem unrealistic and borderline irrational at times. For all we know, that might just be the best adaptation to their natural environment.
I might as well end this post here, for as you can tell, I can't seem to conclude what's rational after all.
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