ARHIVELE OLTENIEI - Universitatea din Craiova

Behavioural Finances and Their Influences on Financial Markets 343said, the noise of trader’s jungle is one of the most sensible in the world 4 . Theycan win if they will believe that the rumour is true, but even it is not the case, itcan also have different financial consequences. Rumours, on financial markets, areconsidered substitutes for news. The news on financial markets are absolutelycritics. Therefore, in absence of news, something is invented. In a stressed andtensioned atmosphere, all traders operate in a very receptive state. The fear thatcomes from the fact that someone could know something that the do not know isthe cause of the stress and anxiety. In these situations, traders need to know thattheir point of view is confirmed by someone else.The lack of information is compensated by speculations. Thecommunication of speculative thoughts is a classic form of development ofrumours. The rumours are amplified when their content is interesting andrelevant. The taking over and acquisitions are an example of an event favourablefor the development of rumours. Statements like „We are always interested inreasonable and good acquisitions!” or “We don’t want to say anything about thissubject!” are ways of starting all kind of rumours and fantasies.Are the rumours from financial markets different from other kind ofrumours? No, but there are different factors that make financial marketsreceptive to any kind of rumours 5 :• the number of participants is limited. The dimension of the receptivepublic to rumours is limited and traders have an efficient communication web;• traders are experts in their domain and they have a great credibility. Theyknow very well financial markets and they are specialists in different products andfinancial instruments. Traders do not believe all “fresh” news that they heard;• the time is very important. Traders are submitted to the pressure oftime. This tensioned and stressed atmosphere represents a favourable ground forthe propagation of rumours. Traders do not have time to verify the news or theiraccuracy. They have to decide what to do even if the do not know the truth. Thenecessity of taking rapid decisions maintains alive the “hunger” for news and, inthis way, for rumours too.• comparatively with another kind of rumours, this that are present onthe financial markets implies always financial risks. A trader can be wrong. If hedoes not the transactions, he could lose the benefit if the rumour is true.Generally, the trader is not preoccupied with the source of the rumours, becausehe do not have the time to think about the source. The are traders that even donot think if the rumour is true or not;• financial markets are a kind of space where people are invaded withnews. It is known that the rumours are amplified by the lack of news. The samething happens when there is too much news. Which news is correct when we4 F. W. Koenig, Rumour in the marketplace: the social psychology of commercial hearsay,Auburn House, Dover, MA, 1985, p. 154.5 J. N. Kapferer, Gerüchte: Das älteste Massenmedium der Welt, Gustav KiepenhenerVerlag, Leipzig, 1996, p. 253-255.