"they have a huge volume of positive feedback"
Is that a pun or something?
Amazon’s $23,698,655.93 book about flies
71–80 of 145 posts
Re: Amazon’s $23,698,655.93 book about flies
#72Earlier quoted context omitted.
It won't, because although computers have a lot of control over the market, people also look at it pretty regularly. The reason why nobody noticed a $23,000,000 book on Amazon is because out-of-print biology books are not very liquid. If that were Microsoft stock, someone would have manually made a bet on it, and then the price would have corrected after a while.
"It won't, because although computers have a lot of control over the market, people also look at it pretty regularly" The problem is a vast number of transactions, and huge price moves, can happen in literally the blink of an eye.
So what? If you're a value investor, it's not your problem. The price is not going to stay wrong for very long.
The only people that will have problems are people who are heavily-leveraged and have no hedge.
Re: Amazon’s $23,698,655.93 book about flies
#73Earlier quoted context omitted.
It won't, because although computers have a lot of control over the market, people also look at it pretty regularly. The reason why nobody noticed a $23,000,000 book on Amazon is because out-of-print biology books are not very liquid. If that were Microsoft stock, someone would have manually made a bet on it, and then the price would have corrected after a while.
"It won't, because although computers have a lot of control over the market, people also look at it pretty regularly" The problem is a vast number of transactions, and huge price moves, can happen in literally the blink of an eye.
True, but at the same time, we're talking about billions of dollars of real money. In clear self interest, all those institutions will have built obvious checks in their system. Losing several billions of dollars in seconds is something they want to avoid.
Indeed, the fact that the flash crash was the definition of something with a vast number of transactions, huge price moves, and happened in the blink of an eye but still was relatively minor and almost inconsequential shows the reliance of the stock market.
Re: Amazon’s $23,698,655.93 book about flies
#74Someone should try selling a book that there are limited copies of (ie one that can't be procured easily) to see what happens if someone buys from a seller who doesn't have it.
The nice thing about selling books is that you aren't bound to deliver the book - you can always just cancel the contract and refund the money. It's unlike short selling stocks in that respect; you aren't vulnerable to a short squeeze ( http://en.wikipedia.org/wiki/Short_selling#Risk ). (For an example, read up on Porsche & Volkswagen: eg. http://www.nytimes.com/2008/10/30/business/worldbusiness/30i... )
The NYT piece on Porsche & Volkswagen (and many other market corners) is actually a really useful piece of financial literature. It nicely outlines some of the outlandish and clever ways that people can use common market forces to create situations for profit.
I always try to think in a similar way when it comes to startups. Where can you harness some market force to create a favorable position for yourself?
Re: Amazon’s $23,698,655.93 book about flies
#75Earlier quoted context omitted.
Why go to that effort? Did you really save any money, or more importantly time/effort? Paying for the shipping on the other books alone would seem to negate any higher profit margin that resulted in not having to compete with their prices.
Except now he has five copies to sell instead of three, and he can sell them for much more than he paid for the two from the automated sellers.
He's cornered the [Amazon] market in old textbooks :-)
Re: Amazon’s $23,698,655.93 book about flies
#76Earlier quoted context omitted.
"It won't, because although computers have a lot of control over the market, people also look at it pretty regularly" The problem is a vast number of transactions, and huge price moves, can happen in literally the blink of an eye.
True, but at the same time, we're talking about billions of dollars of real money. In clear self interest, all those institutions will have built obvious checks in their system. Losing several billions of dollars in seconds is something they want to avoid. Indeed, the fact that the flash crash was the definition of something with a vast number of transactions, huge price moves, and happened in the blink of an eye but…
It was inconsequential largely because most of the wonky trades were voided.
Re: Amazon’s $23,698,655.93 book about flies
#77> My preferred explanation for bordeebook’s pricing is that they do not actually possess the book. There's only one problem with this theory. The Amazon TOS requires sellers to have inventory before they can sell inventory. And they will ban you for life for violating that.
Ha ha ha ... I've encountered lots of annoying sellers who do this -- I make an order and they cancel it last minute because they obviously don't have the book/CD. Yet I keep on seeing them appear.
Re: Amazon’s $23,698,655.93 book about flies
#78I've seen lots of books on Amazon priced at $0.01 or $0.02 before. Maybe a result of similar processes? (I always assumed they were some kind of scam, since why the hell would someone sell a book so cheap?)
Re: Amazon’s $23,698,655.93 book about flies
#79Earlier quoted context omitted.
If you play World of Warcraft this is a solid Auction House technique. I find it humorous to see it applied to the 'real' world (not that WoW economics aren't just as 'real'). The ability to push the price down gives informed actors some pricing control on the market, and the subtext is that it allows for folks to push around pricing to understand the elasticity for any product. Now if you can get them to buy a 'put'…
And (from what I understand) this is just the kind of thing that High Frequency Trading algorithms are doing.
> And (from what I understand) this is just the kind of thing that High Frequency Trading algorithms are doing.
In stocks, there's almost always someone willing to buy and someone else willing to sell at any given price, so how are you going to drive the price down without selling stock?
Re: Amazon’s $23,698,655.93 book about flies
#80Automatic pricing is super common these days, even on more expensive things than books. I'm actually working on a startup called shopobot.com that wants to help people use the volatility to their advantage. We see rapid $50-100 swings on things like SLRs, so it's actually pretty significant.
Ironically our site is down right now because we're based on Amazon's web services. Karma? :)