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Nintendo DS (DS)
at 12:51PM PST on December 2, 2009.
The problem I find is that if TSE is to utilise the wisdom of crowds theory, then it should aggregate all information about a stock and reflect that in the price. Too often however, new information will come to light and the price doesn't shift.
Generally speaking, it has to be something really obvious for there to be any price movements, like Brutal Legend tanking at NPD, for example. So it's not completely broken. If it was calibrated correctly however, there would be more fluctuation in the prices.
Exacerbating this problem I think is the general lack of activity which means the time trust & auto market makers have more influence over the prices than they should for the volume they were designed for. At 75k, you only need three people to put their time trust in something to shift the price but there is no equivalent going the other way. Regular players therefore get 175k to buy anything they like and because they have to spend it, I wager they are less fussy where the money goes.
Hence a stock like this can grow this high because a lot of people see the DS doing well and think it suitable for the time trust. As it keeps going up, it makes people money, people see this and the cycle continues.
When there was a lot more trading, the effects are neglible but at current volumes it puts it out of whack. Unfortunately, unless something changes dramatically I don't think it's fixable.
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