"El mercado de valores es la historia de ciclos y del comportamiento humano que es responsable de las sobrerreacciones en ambas direcciones."
— Nassim Nicholas Taleb
Simplified Meaning:
The stock market tends to go up and down regularly, much like a roller coaster. This happens because people often react strongly to both good and bad news. For example, if there is exciting news about a company creating a new product, many people might rush to buy shares of that company, causing the stock price to increase quickly. On the other hand, if there is bad news, like a company facing a big loss, people might panic and sell their shares, leading to a sharp drop in the stock price. These strong reactions make the market move in cycles of highs and lows. If you're investing, understanding that the market will always have these ups and downs can help you stay calm and not make hasty decisions based on short-term changes. Knowing this can help you invest more wisely, by not selling in a panic when prices drop or buying too eagerly when prices are high. Instead, you can focus on the bigger picture and plan for the long-term.
