by Simon Black
This morning I woke up bright and early to participate via the Internet in a live auction that was being held halfway across the world.
The Hong Kong branch of Spink & Son, a British firm originally founded in the mid-1600s, was putting a series of Bruce Lee memorabilia under the hammer. And as a lifelong fan of Bruce Lee, I couldn’t miss it.
The items up for sale include a couple of pairs of Bruce’s own nunchaku, his eye-catching yellow jumpsuit from Game of Death (in which he fights Kareem Abdul-Jabbar), and some of Bruce’s hand drawings.
When the bidding for the first lot opened, the price immediately surpassed the auctioneer’s initial estimates. It was a frenzy. And before I knew it, the gavel fell and I had missed the boat.
The auction was an emotional frenzy. It’s not an efficient market. It’s full of fear, euphoria, and aggression.
In short, it’s completely irrational… everyone is bidding because everyone else is bidding. It has nothing to do with value and everything to do with the crowd.
The stock market is the same way.