Memes and Markets

“I define fundamentals as being whatever market participants are thinking about the market. These ever-changing fundamental stories may be better described as being transient investment themes. The history of markets demonstrates that the extreme of every economic era is defined by a compelling concept that becomes so simple and so popular that it effectively becomes a slogan. Memetics, which is the study of the propagation of information, provides some insight into this phenomenon. A meme, similar to a gene, is an information code that is transmitted from person to person. The semiotics memetics model suggests that when these transient investment themes enter the propaganda realm, they finally lose their power to attract new investors into their paradigm. This understanding has identified extremes such as the “Fantasia” deflationary climax in the fall of 1998, the E*Greed extreme of 2000…”
Woody Dorsey