A Not So Perfect Market?

Now there is such a thing as supply and demand in this economy. I will not elaborate more on this subject because I'm sure it is well known. Anyway, a place such as eBay allows --in theory--the creation of a "perfect" marketplace where millions of transactions bring every item to an equilibrium price. I know that I research products on eBay to see what the "fair market price" is for something before I decide to buy it at a retailer. However, occasionally the market acts irrationally. My point is this. Sometimes (more often than one would think), sombody pays too much for something. This could be for a million reasons and as long as I'm not that person, all is well. As you know I had an extra Xbox 360 hard drive from my repair fiasco a couple months back. I decided to list this hard drive on eBay to see what I could get for it, because at this point a 2nd hard drive is of no use to me. A new hard drive retails in stores for $100, so one would think that the online prices would be at or below that price. Now I know that some places are in short supply of these hard drives but where I'm at, there are plenty of them. This must be the case because people were paying over a $100 + S&H for new hard drives. If people want to pay that much for them, thats grand. Back to the story, I've managed to digress long enough. I listed my hard drive (never used but not in a package) on ebay expecting to receive below $100 for it. I actually saw one go for $86 after shipping so thats what I was expecting. However this was not the case. Without going into some climaxing rampage of details I will just tell you how much I got for it. $135 +S&H. I never thought that I would receive $40 more than a new one in the stores for one that was not in a case. I'm half tempted to go buy up all the ones I see in the store and sell them for a healthy premium online, because apparently there is a shortage somewhere. I am not aware of one and all my friends are amazed that I manage dto get that much. I would of been happy with $80 since after all, it was free to me. However ebay and paypal took a slice of it, a bit more then I think they should of, but whatever.

I notice that in the stock market this happens too (this is not news, most everybody notices this). I have posted about my liking of the Gold industry and how I think its a great investment, especially for the next few years. The price of gold fluctuates every day and in turn the stock prices of gold mining companies does as well (Gold = Precious Metals). Sometimes the market over reacts and the stock will drop like $2 a share in one day, now if I had more money this is when I would start putting in more money, on these dips. I just think its funny that people will panic so much on a solid company because the price of gold goes down a few bucks one day. You bought the company knowing that there would be times like that (or maybe you didn't, maybe your shorting the stock or trying to make a quick buck). Guess what, it goes back up to where it was over the next couple of days then proceeds to go even higher. Bottom line is, the market over reacts all the time. It's people like you and me (capitalist loving people) that need to recognize these opportunities and profit from them.