Irrational Exuberance

Deciding to wait in line for a restaurant filled with people, acting as the S&P 500 spirals downward, stock market booms, animal spirits...irrational exuberance. If a group of people trigger the result of other groups following similar action, then the action is perpetuated and grows in magnitude. Whenever I see a line for something at the front which I cannot see, I am tempted to wait in line despite not knowing what awaits me at the end. When I see a group of people sprinting towards me in fear, I am going to run with them despite having no idea what they are running away from. In the case of the housing bubble, upward spiraling home prices spurred people to purchase homes (in some cases multiple) in the hopes of selling the homes at a profit a short period of time later. This increasing demand for houses that pushed prices upward was artificial as the purchased houses were to be added to the supply soon after purchase. As this process continued for a few years, and many people were making money easily, a rumor arose among the public that real estate was recession-proof and a fool-proof investment due to the fact that people need shelter. However, the irrational exuberance of the whole episode points to the eventually stabilization of prices and the loss of available capital (perceived) to homeowners.

While at Cambridge, I still remember one of my finance professors saying: stocks are like cows. I assume he used this term not only to describe irrational exuberance of stock price fluctuations and booms, but also the implication that investors can have the brain capacity/ability of a cow when it comes to stocks.

Is it really irrational to follow mindlessly after a group? Yes, if you are in a position of having contradicting information, flexible time, a cynical state of mind, being the factor causing the movement, and a few other positions. However, it is also rational to follow mindlessly after a group if you are in a case of asymmetric information, believe that others have undergone the rationalization process, or even for the sake of just following others with the mindset that if you win, we all win, and if we lose, we all lose.

Irrational exuberance and rational movement is merely dependent on position. Behavioral finance attempts to predict certain movements and allocations; knowledge of the subject's perspective and position is crucial. Do you see the glass half full or half empty? That depends on your position, in reality and theory.

Position. Perspective. Before judging the perceived irrational exuberance, let us be partial to the factors that may not be in front of us...we must learn to be more empathetic to peoples' cases.

Birthday

Welcome to Montrose

Cho loves his ice cream trash bins.

Waiting...

For dinner.

Tri-tip roast.

I forgot what this was called.

Dinner...forgot to include our waiter, my elementary school friend.

In the streets of Montrose.

MIT crew with the Dane Cook-like comedian.

We love the Laugh Factory.

Laugh Factory in Hollywood...PK was an awesome host!

Hey oldie. How do you feel now that you're 22? Marriage soon, eh?

These are a few of the common things I've heard said to me on my birthday, or days around the date. O yes, and happy birthday.

As a summer baby, I used to be jealous in elementary school of the other children who had their birthday during the school year and had the class sing for them during a coveted school day. However, I soon realized being a summer baby was a blessing in disguise, as it complemented my realized image of my birthday. The truth is that I don't like putting much attention on my birthday, and desire to make it a casual celebration to appease my friends, family, and my own desire of something out of the ordinary. Don't get me wrong, I encourage celebration of birthdays. We need occasions that facilitate the process of celebration, and celebrating the day of someone's birth is worthy and justified.

So, I'm 22 now. Except now, it is no longer marking a year of progression in school; instead, it marks the beginning of my professional life post-college. So, does it feel different to be 22? It is because of the circumstances. If I was 22 yet still had a year left in college, I do not imagine it to feel much different than 21. However, my 22 is experienced and seen differently because it marks a different era in my life. As enjoyable, disciplining, and exposing my past years have been, I sincerely believe that the best years are ahead of me. Starting this year and beyond, it is time to make a tangible impact on my community, local and global.

Home

Dinner time! BBQ

DK's house

Stephen and my uncle.

So, I've been resting at home for the better part of a month.

The majority of my time is spent reading novels, watching Korean dramas, eating ice cream, and taking naps...all in the comfort of my home.

There are random outings: taking my cousin to the airport before he goes to Mongolia for a short term mission trip, DK's birthday surprise, going to my doctor check-ups, visiting the library, Al Joo's goodbye dinner, Adam and Suzie's wedding, and...that's all that comes to mind.

Resting at home is actually pretty exhausting. Waking up, eating, sleeping, reading, sleeping...is tiring. By the time my parents come back to feed me dinner (that's how it basically is because I eat the most), it seems as though I have the same amount of energy as they do (very little). It's actually pretty depressing. As much as I want to be lively and hip at night, my parents come home to a fully rested, yet extremely indolent, lethargic, and inept young man. If I was them, I would probably think...not something good. Instead, my parents are extremely patient with me and my dad is extremely accomodating to my condition. In fact, he is often the one who musters the energy to approach me and cheer me up. What a rebuke to me! Here is a guy who has just come back from working sunrise to late evening, and comes to encourage a guy in his prime youth who has spent the whole day eating and sleeping. Amazing.

Well, I am super thankful for such patient parents and happy to be recovering well. I was actually able to jog (veryyyy slowly) one mile this morning. My lungs haven't worked that hard for a while, so I was very drained when I came back home. I even boxed 3 rounds on the Wii :)

By next year and probably for the majority of the rest of my life, these moments at home with my parents will become quite desirable. Eating dinner together, watching Korean shows together, and spending our evenings together...as routine and insipid as these things appear to be, will become sought after memories in the coming years.

Home.