GLOBAL INVESTOR
JEAN PIERRE VERSTER: Get ready for a roller-coaster ride
The wild swings of US markets have more to do with AI than BigTech, writes Jean Pierre Verster
In 1995, Charlie Munger coined the term "Lollapalooza effect" to describe a confluence of several factors, all influencing in the same direction, causing an extreme outcome. While he used the term in a psychological context, it can be used to describe recent stock price movements in the US as well.
Over the past few trading days, the US has seen (in value terms) both the biggest gain of a stock in a single day (Amazon gaining $191bn on February 4), and the biggest loss of a stock in a single day ever (Meta Platforms losing $252bn on February 3). The bulk of these one-day moves happened within minutes of the companies releasing their earnings announcements...
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