Monday, May 10, 2010

DOW JONES


As posted by Dr. Mahathir Mohamad at Che Det on May 10, 2010 3:48 PM

1. I don't play the stock market but I cannot think of anything more silly than computer programmed buying and selling of shares.

2. The program can work if only a few players make use of it. But when the program is available to tens of thousands, then their concerted programmed buying and selling will surely affect the market.

3. Simultaneous buying by thousands of players will push up the prices very high while simultaneous selling by tens of thousands would push down the prices to extremely low levels.

4. That was what happened when Dow Jones went down by 1,000 points. And as the index go down the computer would direct the players to sell more, and again the index would plunge.

5. As can be expected the other stock markets would panic and follow Dow Jones. Then the whole world would lose market capitalisation for no good reason other than the effect of the computer's programme.

6. Governments should ban computer programming for stock market gambling. Otherwise periodically we will be seeing stock prices plunging.