New Laws of the Stock Market Jungle, The: An Insider’s Guide to Successful Investing in a Changing World

Chapter 7. Imbalances and Upheavals

Aggressive approaches and tactics are leading to more unstable short-term imbalances.

In the physical world, there are self-correcting mechanisms at work that provide a natural offset to asymmetric and unsustainable growth. Whether referring to cell division in a developing organism or the ratio of predators to prey in a closed population of animals, all are governed by feedback loops that help to keep unhealthy excesses in check. Many counteract imbalances through chemical signals or similar means. Often, though, the limiting force is some sort of involuntary culling, such as mass starvation, that typically kicks in after substantial disparities have arisen. Indeed, systems can sometimes remain unsettled ...