As long as involve free market, in the name of supply demand, there will be bubble and burst, with volatility along the way. Unless, it is intentionally controlled by government, in the name of stability.
Human being is emotional. When the price surge pass certain threshold, it become uncontrollable, and price go up like crazy. In the same way, when the price down pass a certain threshold, people become panic and price go down like crazy too. The threshold is the tipping point of epidemic, spread through every corner without miss. It is such a danger. But unrealized, people is such irrational creature. Rationality is such a boring game and bring no hope for our urgent needs. Imagine if you tell a poor guy there is no hope to get rich, but can improve his life if he follow a 20 years plan. I reckon that he rather go buy jackpot everyday. In that case, he can has hope everyday that when luck come, he can get rich instantly, even though he may incur huge losses over 20 years if he don't hit jackpot, which is a lot more likely.
Yes, instantly is the point. We all live in a boring world. If we could not create excitement, our energy will slowly drained out. If there is no short term hope, we cannot generate motivation to move on. Very few people can look at a long term goal and work silencely toward the goal. We all need to complete short term goal, one by one, it is like fuel, give us energy to move on step by step to accomplish our long term goal.
Market is suppose to be a place to determine price where people who trade has different needs, different view, but poccess same level of information. everyone is rational and will not influenced by other people when making decision. This is ideal situation. When speculator and gambler come in, it's like stone throw into the water and create splash and wave, they create volatilithen and when the stone become too big, the volatility can become Tsunami!!!
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