But the idea of an efficient market has been blown out of the water by some traders who can consistently beat the odds year after year. My friend was one of those and I know he had an instinctive, intuitive feel for the markets. "Behavioral finance" is the term for this.
Well, I do a lot of this as a book trader. I have to consider the behavior of my competition, the folks who are actually selling the books, socioeconomic factors that effect the quality of books available in a region and what my buying public wants or needs. People pay more for books that they feel like they need than they are willing to pay for books that they want. So, for instance, when I come across an 1889 book on the electrical wiring of multi-story buildings I ask myself "Who will buy this book and how much will they pay?" but I don't really take the time to ask and answer the question, I just sort of instantly conjure up an image of the guy who is in charge of some major restoration project and I "intuit" that he will pay good money for the book. In the course of a 2 hour book sale I will make thousands of decisions along these lines. I don't have time to really think anything out. Of course, I also have electronic devices that give me database information based on bar code reads but I gain no competitive advantage through the use of these devices because all the scanners who attend the sales have these also.
"Tell me, what is it you plan to do with your one wild and precious life?" - Mary Oliver
