After reading this chapter, I found the passage discussing the buying and selling of a house in Chicago and finding the shortest line in a grocery store to be very intriguing and applicable to my life. Naked Economics gives an impossible example of finding a house worth $500,000, but only being sold for a mere $200,000. The example also states that the house has been clearly advertised to the public. The falsities in this example are: First, the seller should (and would) have checked the house's value compared to other houses in the proximity. Second, the real estate agent, acting with rational self interest, would have bought the house and flipped it herself instead of working for a buyer. And third: other buyers would have seen the deal and attempted outbid the offer. To be sum this example up, there are no "great deals" or ways to cut corners in the stock market, although many people make the mistake of believing otherwise. I thought this passage was intriguing, and also a bit entertaining. When seeing how many people attempt to find an easy way to cut corners to make money, I have realized that humans, for the most part, will always attempt to take the easy rout, no matter how implausible it may be.
No comments:
Post a Comment