by Avi Gilburt
While reading of the title of this article may cause you to make certain assumptions about what you are about to read, I can assure you that this is not a politically motivated article. In fact, politics has absolutely nothing to do with the analysis and conclusions presented herein.
I want to start with the assumption that we have spoken about so often, and that it is social mood which directs our actions in life, including our willingness to buy stocks. As Robert Prechter noted in a study he published in 2012 on this topic, “[s]ocionomic theory proposes that unconscious social mood regulates social actions.”
The basic premise is that when people feel good they engage in positive actions, and vice versa. But, that really is an oversimplistic perspective of the theory. Ultimately, it suggests that biological responses have more to do with the mass sentiment as compared to exogenous events.