I think this is a great answer. It's a more expanded version of what I was going to say: "it's easier to destroy than it is to create". This fact is probably *why* humans instinctively treat fear as a greater motivator than greed; bad things can happen quickly with dramatic effect. Good things can usually be seen in advance, since there's a ton of work that people had to put in to accomplish the good things.shess wrote: ↑Sun Jun 20, 2021 1:18 amI mean, Gamestop and AMC. But that's not really broad-based.
Personally, I don't think it's all that surprising, many systems work this way. Increasing stock market value is akin to increasing organization in a system - it takes long sustained and intentional effort to get things more organized, but it takes little effort and no intention at all to disorganize things. Running around in a panic pretty much suffices. Part of this is that reducing entropy adds tension to the system, which is potential energy, and when that tension is unblocked the energy is unleashed, which breaks other bonds releasing more energy causing a chain reaction. It dampens when the average bond being broken doesn't release enough energy to break new bonds.
In the case of a single stock, perhaps you have closely held info about last quarter's profit that might surprise on the upside. But how does an index investor see a surprise to the upside like that? If COVID is what it takes to knock the market down 40%, what's the inverse of COVID -- and that happens suddenly without anyone seeing it coming so it isn't already priced in? I mean, economical fusion power, maybe? But it will have been 80-100 years in the making or whatever, with hints for decades along the way. Seems like most of the dramatic movement to the upside is generally correlated with finding out that an unknown bad is slightly less bad as it comes into clearer focus. Not that aliens landed and gave us superior technology overnight.