Colin Camerer Quotes

Looking at the stock market to understand the economy is like studying a manic depressive in order to understand human nature.

In a sense, the market, by expecting a fall in prices, discounts that fall and makes it happen right away instead of later. Expectations speed up future price reactions.

I gradually became persuaded that the subjects, without intending to, had revealed to me a basic truth about markets that was foreign to the literature of economics.

A second reason why science cannot replace judgement is the behavior of financial markets.

Volatility may be rising simply because investors must digest more information every day.

I caught hold of the great bull market in soybeans in 1977. I had no idea what I was doing, incidentally.

When the weather changes, nobody believes the laws of physics have changed. Similarly, I don't believe that when the stock market goes into terrible gyrations its rules have changed.

I don’t know why the Stock Market does what it does.

When I first began studying prices, it wasn't a topic that mathematicians were working on. Purely by accident, I saw a set of data on price changes presented in a lecture and realized they behaved similarly to the geometric models I was already studying.

You cannot have an asset that goes up in price 1% every month or 1% every six months or every day without people starting to start thinking it'll do the same tomorrow, so that's why these bubbles form.

An investment decision in the common stock of a company frequently involves a whole lot of factors interacting ... the one thing that causes the most trouble is when you combine a bunch of these together, you get this lollapalooza effect.

Cheer the bull, or cheer the bear; cheer both, and you will be trampled and eaten.

The idea that commodities, as an asset class, is finished is just fundamentally flawed.

No one would suggest completely ignoring news about your investments. Enron investors, for example, would have been well served to sell once early reports of accounting irregularities surfaced. But the key is to keep news in context and act only if further reflection or study indicates that the core thesis for an investment has changed.

I've explained before the power psychology has on the markets.

Well, the most important thing in investing is to know what you're investing in, and if you're confident in the outcome, it's important to stay true to your position.

When investing, pessimism is your friend, euphoria the enemy.

A price decline is of no real importance to the bona fide investor unless it is either very substantial say, more than a third from cost or unless it reflects a known deterioration of consequence in the company's position. In a well-defined bear market many sound common stocks sell temporarily at extraordinary low prices. It is possible that the investor may then have a paper loss of fully 50 per cent on some of his holdings, without any convincing indication that the underlying values have been permanently affected.

I've always been sceptical about the notion that the market is a person you can engage in an argument with, and that that person is an intelligent, rational, well-intentioned person: it is fantasy. We know that ... the market is subject to irrational optimism and pessimism, and is vindictive ... You're dealing with a crazy man ... Having got what he wants he will still kill you.

History demonstrates that participants in financial markets are susceptible to waves of optimism. Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time.

[There will be movement toward] behavioral economics... [which] involves study of those aspects of men's images, or cognitive and affective structures that are more relevant to economic decisions.

More money is lost anticipating the changes in the overall stock market than any other way of investing.

I believe the only things that really matter in investing are the bubbles and the busts

Reuters was completely accurate that I am concerned about the level of the market. But I also made it clear on the conference call (and I believe as Reuters reported it), that it is almost impossible to predict what a market will do in the short term. There are too many variables.

The markets are moved by animal spirits, and not by reason.