The Dawn of Social Prediction

"Economists pride themselves on being the most scientific of social scientists. This leads them to reduce all human motives and behavior to quantifiable variables such as utility, welfare and income. But people are not by nature quantitative, and their motives often have no economic basis. Today’s most divisive issues, from fairness and inequality to national identity and culture, don’t have economic solutions."
~ Greg Ip.  August 26, 2017.  "In Defense of the Dismal Science." Wall Street Journal.

"The American company that promoted the Internet hardest in its early days, Sun Microsystems, conducted research in 1997 into how people read on the Web and concluded simply, 'They don't.' They scan, sampling words and phrases. Why? In part because any one page, on which the fluttering user happens to have lighted momentarily, competes for attention with millions more."
~ James Gleick. 1999. Faster: The Acceleration of Just About Everything.  Vintage.  p.87.

"In the same way that computers have operating systems at their core — dictating the way a computer works and serving as a foundation upon which all applications are built — everything in life has an operating system (OS). It is at the OS level that we most frequently experience a quantum leap in progress."
~ Bryan Johnson - Founder, Braintree and the OS Fund

"Much of the human experience (knowledge, disease) spreads by proximity, and for any one person the number of elbows in proximity has exploded. In past times, even in the most crowded city, we lived close enough to only a few people to, say, read their journals or track the temperature of their hot tubs. Now, in hordes, they put that information on-line. The multiplication of information pathways leads to positive feedback effects in the nature of frenzies."
~ James Gleick. 1999. Faster: The Acceleration of Just About Everything.  Vintage.  p.86.

The Story-telling Cycle in Markets

Almost 99 percent you realize is just stories in our minds. This is also true of history. Most people, they just get overwhelmed by the religious stories, by the nationalist stories, by the economic stories of the day, and they take these stories to be the reality.
~ Yuval Hariri, Historian and author of  the books "Sapiens" and "Homo Deus"

Money is probably the most successful story ever told. It has no objective value. It's not like a banana or a coconut. If you take a dollar bill and look at it, you can't eat it. You can't drink it. You can't wear it. It's absolutely worthless. We think it's worth something because we believe a story. We have these master storytellers of our society, our shamans — they are the bankers and the financiers and the chairperson of the Federal Reserve, and they come to us with this amazing story that, "You see this green piece of paper? We tell you that it is worth one banana."
~ Yuval Hariri

“It’s a motivated decision to say ‘no’ to learning available but unwanted information ....  People avoid information if it’s going to make them feel or behave or think in a way they don’t want to”—especially any evidence that could jeopardize their belief in their competence and autonomy or could require taking difficult or prolonged action." 
~ Jason Zweig citing Jennifer Howell, a psychologist at Ohio University, in his excellent column in the WSJ

On the first trading day of this year Valentijn van Nieuwenhuijzen’s laptop pops open.  He sees right away that something special is going on. The MarketPsych Indices, the system by which NN Investment Partners [formerly ING] measure sentiment in the market, are coming in…words that are associated with stress and gloom course through digital media...

The main strategist of the Dutch asset manager, with € 187 billion under management, taps the brakes: he reduces investments in shares and raises more cash. Later that week the stress spreads: worldwide stock markets went down sharply...

~ Lenneke Arts & Jeroen Groot.  February 28, 2016.  “Beleggen met big data wordt langzaam gemeengoed.” Financial Daily.  (Translated from the Dutch).

Switzerland, Neurofinance, and When to Sell in a Bull Market

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing."
~  Chuck Price (then CEO of Citigroup) to the Financial Times on July 9, 2007. 

"The current level of the CAPE ratio 'would suggest reducing your holdings of stocks, especially for a long-term investor. We can't time the market accurately, but we know that when it's this high, over the long term, it usually doesn't do great.'"
~ Robert Shiller quoted in CNBC, February 24, 2017

"Merchant: In this chaos of opinions, which one is the most prudent?
Shareholder: To go in the direction of the waves and not to fight against the currents."
~ Joseph De La Vega.  1688.  "Confusion de las Confusiones."  (The first book about the operations of a stock market, the Amsterdam Exchange).