On... the Wisdom of Crowds

My son had an event at School that celebrates Mental Health Awareness.


According to the School Newsletter that we received, the children were supposed to wear their School Uniform (white shirt), with a green item as an accessory on Friday. For context, he usually wears his Sports Uniform (yellow T-shirt) to school on Fridays.


That Friday, I put him on his school uniform instead of his sports uniform, feeling proud that I was a responsible parent - Having read his School Newsletter (I'm usually too lazy to read it) and also remembered the instruction that was given on the Newsletter. When we arrived at school, we were met with a surprise.


As we were driving into the parking lot, my son saw his classmate walking pass in the distance, and she was wearing her Sports Uniform! My sons first reaction was that we had made a mistake. He was supposed to wear his Sports Uniform as usual and not his School Uniform. He did not want to bring along the green accessory that he had prepared as he realized that we had made a mistake. "Well, your friend could be the one that made a mistake. Be confident", I told my son. After all, I had read the Newsletter and had gone over it with my wife. So, I was confident that we did right.


As we walked towards the school gate from where we parked, I realized that something was wrong. No other student was wearing their School Uniform or brought along a green accessory. My confidence plummeted. Had I made a mistake? Or was everyone else wrong?


Now what has this got to do with trading? This is what exactly happens in the market. Its called the Wisdom of Crowds. In my sons case, I later found out that we had read wrongly and the event was the following week. And everyone else is right. Thats what exactly happens in Trading. The market sets the price!


When the price of an asset is down or being sold off, it usually means there's something wrong and vice versa. Don't fight the market - trust in the Wisdom of Crowds!

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