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Episode 3655:
Jesse Cramer reveals how rogue ocean waves form through constructive interference and why the stock market behaves the same way, with fundamentals, expectations, and irrational behavior combining into outsized swings. He shares why amateur investors are better served by long-term investing, low fees, diversification, and rebalancing than by trying to predict the next big wave.
Read along with the original article(s) here: https://bestinterest.blog/rogue-waves-rogue-markets/
Quotes to ponder:
"Constructive interference is likely a cause of rogue waves: multiple small waves happen to cross paths at the same spot in the ocean, producing an uncharacteristically large wave."
"Irrationality can be exuberant or pessimistic. It pushes highs too high and lows too low."
"Instead, you've got to choose an investing strategy that ignores the waves altogether."
Optimal Finance Daily is a daily personal finance podcast where we narrate the best articles on financial independence, investing, saving money, and money management, read to you by a professional narrator so you can grow your wealth a little more every day.
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