Contrib. 1b: Image and manipulation
Message from email@example.com (March 1, 2000)
Have you considered that the cause of the uncertainties might be deliberate instability,
hyperbolic manipulation associated with BOTH factors (fundamentals and image).
When average people don't even have good counts and numbers on the total takings
by the king's men manipulators in hardly any aspect of life, why would understanding
of what's real in stock values be any different?
manipulation coeff. or image coeff.?
You are largely right. Manipulation distorts values, in a small scale or a big one.
We may have an example now with the current bubble (*), where there seems to be a
coalition of many vested interest.
It would be a little complicated to add a "manipulation coefficient" to my primary PER
and/or to my image coefficient.
But why not?
In fact, my image coefficient is an aggregation, a rough set, as fuzzy logic people may say.
Although it is not easy to break up its components, it can be considered as a house
accommodating whole families of sub-factors (a bit like the arbitrage factors of Ross'
APT theory, but going much further). Those factors are:
Technical factors, i.e. liquidity / Illiquidity
Behavioral factors, more or less , emotional - i.e. greed, fear,
crowd mimicry / herd instinct (*) - Also cognitive flaws, automatisms...
Manipulative factors, i.e. biased information (on fundamentals), biased advice
(by market gurus or sellers), direct buy / sell intervention on the market (*)
and so on.
(*) Additional comment (Nov. 2002):
When I was talking of bubble, herd instinct, biased information and advice in March 2000,
just a few days before the dotcom crash, did I read it in the stars ? :-)