The basic secrets of the bag

2006/03/01 Galarraga Aiestaran, Ana - Elhuyar Zientzia Iturria: Elhuyar aldizkaria

• Giza zientziak
• Enpresa

Chicago bag.

CP

"The Bilbao Stock Exchange has risen 2.58 points at the end of today's session and its overall index has been 1.955.20 points." "The decline started in Tokyo has continued throughout Europe." All media give a hole to stock market information. Are people so interested? Is it normal for anyone to have stock market shares?

The answer is yes; nowadays it is common for anyone to participate in the stock exchange, even if they do not know very well what that market is or for what. For them, Iñaki Heras has written the book, thinking that it will help them to know the basics of running the bag.

And it is that, although the media report the stock market, having more information available has not brought with it a better knowledge of the people. However, there are more and more small investors. According to Iñaki Heras, to a certain extent it is not surprising, since lately interest rates are very low. For most, it is not worth having the money entered in the bank, and it can be an opportunity to take advantage of the savings.

Sheep, predictions and butterflies

When investing in the Stock Exchange, besides for economic reasons, psychological and sociological agents also have a great influence on people. For example, if people in the area have money on the stock exchange and say they are winning, the neighbor also wants to take part in the stock exchange. And that is very common in our environment.

For Heras, however, it must be kept in mind that people easily say that they have won and that they calm down when they have losses. Likewise, the human tendency to eliminate bad memories and remember them with good times makes there the risk of having a distorted view of the bag.

An example of butterfly effect is: When the New York bag cools down, the European bags hinder.

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Experts also analyze the behaviour of stock investors and, as a sign of the importance of the psychological variable, there are several expressions. One of them is the 'behavior of the flock', which is what was studied, among other things:

The Renter Victor Eguiluz and Martin Zimmermann of the Mediterranean Institute of Advanced Studies of Mallorca.

This study was published in the scientific journal Nature and was well known. A study was conducted on the methodology used in physics and it was found that expressions are one of the main drivers of the financial markets. It seems that brokers have a lot of information, almost the same for everyone, which leads investors to behave like a group of animals, so stock market incidents are not random.

Another known expression is self-fulfilling prophecies, that is, prophecies that are fulfilled by simple fact. An example is collected in the book of Heras. In recent years, investment and pension funds move a large amount of money into financial markets. Each of these funds consists of actions that collect the contributions of thousands of small participants.

However, taking advantage of their strength, funds can cheat. If an expert group says a fund is going to rise, participants move there. Consequently, the price of actions rises, so, for example, prophecy is filled.

Iñaki Heras, professor at the UPV/EHU School of Business Studies and author of the book Bolsa Introducción a la economía financiera.

A. Galarraga

And the expression “butterfly effect”, which is used in other areas, is also very useful to designate a frequent phenomenon in the bag. In this sense, it is often said that New

When the York bag cools, the European bags hinder. Moreover, today computer technology has made it possible for the bags to be interconnected 24 hours and for the activity to be continuous.

In the long run...

However, without taking into account that all these agents are and many more, people invest in stock; according to Heras, in most cases with the intention of speculating. In order to obtain short-term benefits, people buy shares to sell them more expensive than they have bought and thus get the difference between the purchase and sale price.

However, it is not the only way to participate in the bag. Others put money into the shares and leave it there for two years, three or four... That is the classic way to invest in stock. And that is what experts advise. According to them, the Stock Exchange is the investment that offers the highest yield in the long term.

Investors put money in stock to squeeze the money.

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However, Heras has doubts about it. And how much

is it long time? In the book he gives an answer: "In economics it is known that it is a long term: the time necessary to realize what has been said, much less." He then cites the words of the prestigious economist Keynes: "in the long run all dead."

Other investors invest directly through the Internet. They intend to obtain short-term benefits and for this they are reduced. As explained in the book dictionary, leverage is the indebtedness of an investor. This term is used to indicate that an investor has indebted all or part of the purchase value when acquiring an action or other financial product. There are investors who risk a lot and borrow money they don't have from their own to buy shares.

In this age is very important. Although it seems topical, it is usually met and the younger the investor, the more risk it behaves and vice versa. It is clear that sociology and psychology are closely related to the financial economy, but also to policies.

Own logic

To find out where the bag will go, scientists have developed different models. But it is almost impossible to get a perfect model.

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Scientists have developed various techniques and models to analyze and investigate stock market incidents. These models are based on chaos theory, statistics, probability and other mathematical theories, and with them experts try to predict the fate of the stock market.

However, considering so many variables, it is practically impossible to achieve a perfect model. Even more so when some of these variables are not predictable. For example, wars, attacks... have an enormous stock market influence and often cannot be foreseen. Who could imagine that September 11, 2001 would take place in New York? If that were not enough, the decision of a single person can revolutionize the trend until then. What if Bush abruptly changed economic policy?

Instability is one of the characteristics of the bag. Although it is related to the real economy, it is often difficult to perceive the logic of that link. Many say the bag has its own logic and works accordingly. And considering the amount of money that moves, it is advisable to know the bases of this operation. Financial markets are worth $21 trillion, 50 times more than commercial markets worldwide. In other words, financial markets mobilize around 3,500 dollars per world person. There is something.

What is…?

Here is the Bag. Some of the definitions in the book Introduction to the Financial Economy are:

Bag: It is the capital market specialized in the sale of shares of companies.

Action: proportional part of the capital of a company. On the Stock Exchange it is a business stock trade, in which people who buy shares acquire economic (...) and political rights (...).

(Photo: Recent searches

Dow Jones: Undoubtedly the indicator of the American stock exchange, the most famous in the world. (...) This indicator includes 30 selected industrial values (...). --If there are other known indicators: IBEX-35 of the Spanish stock exchange, CAC-40 of France and Nikkei 225 of Japan.

Crash: The one that occurs when quotes sink or fall into the coffin, in a stock market session or more than one session. In autumn, specifically in October, the most prestigious crash occurred: 24 October 1929 (Black Thursday, the greatest crisis of the century), 19 October 1987 (Black Monday) and, closer, in 1989 and 1997.

Recruitment volume: Number of securities sold on each trading day indicating the liquidity of securities. A value will be very liquid if you quote a lot in stock (...). If contracting a value increases, this means that investors rely more on that value.

Chicharro: Stock expression, very widespread, which serves to designate unreliable values, of bad reputation and high volatility (...).

In New York, as fish vendors

The Bilbao Stock Exchange is the largest in the Basque Country. Founded in 1890, it had a lot to do with the economic, industrial and financial evolution of the Basque Country since its inception. Thus, it offered ways to finance shipping companies, shipyards, commercial and banking companies of the time.

However, globally, the New York Stock Exchange is undoubtedly the most famous. It has also appeared in the cinema, and everyone is known the image of the broker, totally stressed, shouting at trade.

(Photo: easyscreen)

Until the 1990s, transactions in all exchanges were crossed verbally. In Madrid, for example, investors met in corros, and in the center there was a trading table. The exchanges were organized by sectors. To cross the transactions of each sector were 10 minutes; after the dissolution of the group of traders, they could not sell or buy these securities until the next trading session.

At the international level, oral trade mechanics continue to be used, but the continuous market has predominated almost everywhere. In the continuous market transactions are carried out through computer systems. Sales and purchase orders are made by computer and the situation in the market appears on the computer screens continuously and continuously.

But there is always an exception, and the exception is the New York Stock Exchange, in this case. In fact, in this market, the most important stock market in the world, trading is not done through electronic systems, but verbally, except in the Nasdaq market.