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Part 2: The New Laws > Form and Fantasy

Chapter 8. Form and Fantasy

Substance and reality increasingly give way to form and fantasy.

The stock market is something of a paradox. On the one hand, it is a place where numbers rule, where people generally know where they stand, and where the consequences of poor decision-making can be financially devastating. On the other hand, it is a world where dreams can seem real, where emotions can overshadow rationality, and where those who can talk—or trade, if Figure 8.1 is any guide—often have more influence than those who can think. Although this bipolar reality has long been a feature of the share-trading arena, the Bubble years seemed to have been both a trigger for and a reflection of a general shift in favor of the chimerical. In many respects, that period brought out the worst of irrational behavior, with some excesses still lingering despite the devastating bear market that followed. Indeed, though much of the speculative froth now appears almost surreal in hindsight, many players nonetheless seem quick to suspend judgment and assume those days can return again. Sadly, investors who fail to take account of today’s flights of fancy risk getting caught out when the pieces come tumbling to the ground.


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