Musical Chairs
The market for [many] participants is kind of like a game of musical chairs.
The music goes on and on while participants circle the chairs. As time goes on and they keep circling the chairs, everyone participating gets $X amount of money for each hour they circle the chairs. Everyone has the option of quitting the game at any time and taking their accumulated winnings but by doing that, they forgo getting additional money that can be made by circling the chairs. This goes on month after month, so getting out early means they forgo a lot of money gained by continuing to circle the chairs.
At first everyone is nervous and most opt not to play the game but as the game goes on and side liners see those in accumulating money, they join in. The game goes on for so long without the music stopping that 96% of participants get lulled into a sense of complacency and as they daily count their paper winnings. Their respect for risk has gradually ebbed, they only give minor lip service to risk and the abrupt ending that is to occur eventually. That all important visceral feeling of danger has gradually melted away as the music has gone on so long without the music stopping.
There are only 5 chairs for every 100 that are circling them.
Everyone thinks they have an edge in getting a chair when the music stops but obviously, most are not figuring the odds correctly for them being the one because the odds are 1 in 20.
1 person out of 20 is very fleet of foot and has quicker reaction time. They have played the game before and pick up cues the music will be ending soon, so their odds of getting a chair are greater than 1 in 10, while others are slow and clueless and they have almost no chance of getting a chair.
Then, the music abruptly stops just when the maximum number of particpants think it won't.
Even those few with insight, experience, fleet of foot, and quick reaction time are not assured a seat and may only come within a whisker of getting a chair.
Of course, not all play this game.
Lee, Warren Buffett, and others choose not to directly play. [although Warren Buffet et al.'s paper net worth is affected by the game being played and stopping of the music].
In due time, a new game starts although there is no general announcement it has started or where it has started. A few find it and word gradually spreads drawing particpants back.
Fabian
AI
