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Finance Geeks Will Love This New Movie About the Tulip Bubble – Bloomberg

Markets are governed by two things: math and story.

Math is simple. It’s reality, the fundamentals and the underlying supply and demand for whatever’s being traded. The story is where human psychology enters the picture. It’s what causes people to extrapolate wildly, move in herds, and swing from bouts of extreme pessimism to embarrassing optimism. Markets can whipsaw wildly based on story alone, though in the end, raw math eventually wins out.

Markets are at their most exciting when the gap between math and story is massive, when humans are fully in the driver’s seat and prices no longer bear any resemblance to reality. With this in mind, a financial bubble is the perfect setting for a romantic drama because, well, love is the other obvious area where the stories we tell and get swept up in can diverge so sharply from actuality.

Finance Geeks Will Love This New Movie About the Tulip Bubble – Bloomberg}

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