The greater fool theory in capital markets (such as stock market and futures market): people are willing to pay a high price for something, regardless of its true value, because they expect a greater fool to buy it from them at a higher price. The "bigger fool theory" wants to reveal the motivation behind speculation, and the key to speculation is to judge whether there is a bigger fool than yourself. As long as he is not the biggest fool, he must be the winner, just a matter of winning more and winning less. If there is no bigger idiot who is willing to be your "next home" at a higher price, then you will become the biggest idiot. It can be said that any speculator believes nothing more than the "biggest fool" theory. What is stupidity? Bullying refers to buying stocks at high prices and selling them quickly when the market rises to profitability. This operation strategy is usually called fool wins fool by the market, so it can only be applied when the stock market rises. Theoretically speaking, Bo silly also has its reasonable side. Bossy's strategy is that there is a high price above the high price and a low price below the low price. Its rules of the game are like a baton. As long as it is not the last one, it will be profitable. Long-term profit, short-term loss reduction. Only those who receive the last stick will be unlucky. In the art market: expect someone to buy from you at a higher price (greater fool theory): You are willing to buy an art at a high price, regardless of its true value, even if it is worthless, because you expect a bigger fool to buy from you at a higher price. The key to successful investment lies in whether you can accurately judge whether there is a bigger fool than yourself. As long as you are not the biggest fool, you can earn more and earn less. If you can't find a bigger idiot who is willing to buy this artwork from you at a higher price, then obviously you are the biggest idiot. -a stupid theoretical economist in Keynesian game theory, hoping to concentrate on academic research and avoid being troubled by money. So in August of 19 19, he borrowed thousands of pounds for forward foreign exchange speculation. In just four months, Keynes made a net profit of more than 10000, which is equivalent to his income from teaching 10. But three months later, Keynes lost all his profits and borrowed the principal. Seven months later, Keynes set foot in cotton futures trading and achieved great success. Keynes has done almost all kinds of futures, but also set foot in stocks. By 1937, when he "washed his hands" due to illness, he had accumulated huge wealth that he could not enjoy for a lifetime. Different from ordinary gamblers, Keynes, as an economist, not only made considerable profits in this speculative business, but also discovered the "idiot theory", also known as the "greater fool theory". What is the "greater fool theory"? Keynes once gave an example: choose the most beautiful face from 100 photos, and the selected one has a prize. But it is up to everyone to vote to decide which face is the most beautiful. Imagine if it were you, how would you vote? At this time, because of everyone's participation, your correct strategy is not to choose the face you think is the most beautiful, but to guess who most people will choose, even if it is ugly. Here, your behavior is based on public psychological speculation, not your real thoughts. Keynes said that professional investment can be compared to a competition organized by a newspaper. In these competitions, readers selected six of the most beautiful faces from 65,438+000 photos, and the one whose answer is closest to the average answer of all readers will win the prize. Therefore, each participant must choose not the face he thinks is the most beautiful, but the face he thinks can attract the attention of other participants, who are also considering this problem in the same way. What we want to choose now is not the truly beautiful face decided by personal best judgment, or even the truly beautiful face that ordinary people think. We must make a third choice, that is, use our wisdom to predict the opinions of ordinary people and think about what their opinions should be ... This has nothing to do with who is the most beautiful woman, but what you care about is how to predict who others think is the most beautiful, or who others think is the most beautiful ... In the newspaper beauty contest, readers must put themselves in other readers' shoes at the same time. At this time, they should choose a beautiful woman instead of an absolute standard. However, the reader's job is not that simple. Assuming that the 100 finalists are almost equal, the biggest difference is the color of hair. /kloc-There is only one girl with red hair among 0/00 people. Would you choose this girl with red hair? The reader's job is to determine what kind of consensus people will reach without communication. "Choose the most beautiful girl" may be a written rule, but it is much more difficult than choosing the thinnest girl with the reddest hair or an interesting gap between two front teeth. Anything that can distinguish them can be a focus, and everyone's opinions can be gathered in one place. Because of this, we will not be surprised when we find that the most beautiful models in the world are not perfect: in fact, they are almost perfect, but they all have some interesting flaws, which make them unique and become a focus. There are many examples related to this model in life. For example, in the selection of "Top Ten Athletes", the incentive for each voter is that if he "correctly" selects some people, not only 10, but also in the correct order, then the voter will get some kind of reward. But how do we choose the "right" candidate? Is there a "suitable" candidate? Is it right to get more votes? Or strictly speaking, the one who gets the most votes is the first, the second is the second, and so on. Therefore, whether a voter can be selected or whether his nominee can be "elected" depends on guessing what others think. If you guess right, you win the prize; if you guess wrong, you don't win the prize. Here, what we see is correct or not, or who should choose and who should not choose, but the result of mutual speculation by voters (of course, in this process, public opinion has played a great guiding role, and he seems to tell people that so-and-so is the choice of many other people). In fact, people also follow this strategy in the futures and stock markets. People are willing to pay a high price for something, regardless of its true value, because they expect a bigger fool to pay a higher price and buy it from them. For example, you don't know the true value of a stock, but why do you spend 20 yuan to buy a stock? Because you expect someone to pay a higher price when you throw it The "bigger fool theory" wants to reveal the motivation behind speculation, and the key to speculation is to judge whether there is a bigger fool than yourself. As long as he is not the biggest fool, he must be the winner, just a matter of winning more and winning less. If there is no bigger idiot who is willing to be your "next home" at a higher price, then you will become the biggest idiot. It can be said that any speculator believes nothing more than the "biggest fool" theory. 1720, there was such an episode in the British stock market frenzy: an anonymous person founded a fictional company. No one knew what company it was from beginning to end, but nearly a thousand investors scrambled to squeeze out the door when they subscribed. Not many people believe that he really makes money, but expect more idiots to appear, the price will rise, and he can make money himself. Interestingly, Newton took part in this speculation and eventually became the biggest fool. He therefore lamented: "I can calculate the motion of celestial bodies, but it is really difficult to estimate the madness of people." Follow-up: Wow, you are amazing. There are really many idiots in life, including myself. Answer: Hehe, just so-so. My mother told me to keep a low profile.