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Wall Streeters believe the darndest things, like the Earth is flat, the moon is made of green cheese and central bankers are the most powerful force in the universe this side of gamma-ray bursts. OK, so maybe they don't believe the first two things, but there seems pretty strong conviction about the third.
And that's not all—in fact, there's a slew of things pros on the Street hold as true that just don't seem to make a lot of sense, particularly to those on Main Street who get a close-up view of how the real world works. Josh Brown—the "Reformer Broker" blogger, financial advisor with Ritholtz Wealth Management and regular on CNBC's "Fast Money" show—has a Top 10 list that he's been kind enough to share. It lists some of the more bizarre, but true, beliefs that constitute "Insane Things We Believe on Wall Street." Beware: It's only slightly tongue-in-cheek and actually cuts pretty close to some of the myths of the financial markets:
- Falling gas and home heating prices are a bad thing.
- Layoffs are great news, the more the better.
- Billionaires from Greenwich, Connecticut, can understand the customers of JC Penney, Olive Garden, Kmart and Sears.
- A company is plagued by the fact that it holds over $100 billion in cash.
- Some companies have to earn a specific profit—to the penny—every quarter but others shouldn't dare even think about profits.
- Wars, weather, fashion trends and elections can be reliably predicted.
- It's reasonable for the value of a business to fluctuate by 5 to 10 percent within every eight-hour period.
- It's possible to guess the amount of people who will get or lose a job each month in a nation of 300 million.
- The person who leads a company is worth 400 times more than the average person who works there.
- A company selling 10 million cars a year is worth $50 billion, but another company selling 40,000 cars a year is worth $30 billion because it's growing faster.