It’s easy to dislike change when it happens, like our quickly ending summer, but look at this way: change is a constant. Things will always be changing, much like the financial blunders you see here on the Zing blog: People and corporations will always do dumb things with money, but the means in which they accomplish this is always changing. That’s why this week in financial blunders, we examine three wildly different money mishaps.
Less than a week after the Nasdaq Stock Market was shut down from an error that could cost Goldman Sachs $100 million, the Tel Aviv Stock Exchange had a similar market shutdown from human error. Israel Corporation, a company specializing in fertilizers and specialty chemicals, watched its share price fall 99.8% on Sunday after a simple clerical error. Intending to sell shares of a different company, a clerk entered Israel Corporation’s name and dropped their share price from 167,200 Israeli shekels ($46,385) to 210 shekels ($58.) The entire Tel Aviv Stock Exchange fell about 2.5% as a result, and trading was halted by a previously set up fail safe. The clerk who caused the error was fined 10,000 shekels ($2,777) and now has to constantly tell that story about how he accidently shut down the Tel Aviv Stock Exchange.
Too Narcissistic for My Blood
Rich people tend to be the butt of many jokes because of their wealth, and their critics just got some more ammo in that fight. A recent study published in the SAGE journals’ Personality and Social Psychology Bulletin titled “Wealth and the Inflated Self” has an abstract that begins with “Americans may be more narcissistic now than ever, but narcissism is not evenly distributed across social strata.” In simpler terms, the rich tend to be more self-absorbed than any other social class. Over multiple surveys Paul K. Piff of the University of California, Berkeley, discovered the rich have “greater psychological entitlement and narcissistic personality tendencies.” They were also more likely to look in a mirror if the option was presented.
Girls Just Want to Trade Stock
For the first time in years, younger demographics are taking the stock market by storm. CNBS reports “Investors between ages 18 and 24 now hold 11% of all accounts at the online brokerage Scottrade.” Younger investors are more likely to take risks in the market, partially because they’ve just joined a rising market, partially because they haven’t experienced a downfall yet. Regardless of the reasoning, it’s more money getting exchanged. How is this a financial blunder? Last year, the S&P 500 was outperformed by 17-year-old actress Rachel Fox of Desperate Housewives fame. Between 338 stock trades and 30.4% earned gains, she’s leaps and bounds above those twice or even three times her age in the field.
As you can see in this week’s stories, human error, nature and competitive drive all lead to mistakes. Next week and beyond it’ll continue to be a variety of reasons that lead people to financial blunders.
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