the.com/noise trader
trades on vibes, headlines, and gut feelings, then blames the market for being irrational.
means an investor who buys and sells based on rumors, trends, or emotion rather than fundamental value, moving prices without meaning to.
from coined in 1980s finance economics, notably by fischer black in his 1986 paper noise, describing traders who mistake noise for information and trade anyway.
black's paradoxmarkets need noise traders to function at all
vs arbitrageurssmart money profits by betting against them
herd behavioramplifies bubbles by trading on other noise traders' moves
for instance
gamestop 2021 — retail traders drove 1500 percent surge on reddit hype
dot-com bubble — 1999-2000 investors bought any dot-com ticker on momentum alone
dogecoin rallies — elon musk tweets repeatedly moved price with zero fundamentals