tag:blogger.com,1999:blog-7896191028153131182.post5602251846418739733..comments2012-06-02T23:20:07.834-07:00Comments on A Psychologist Looks at the World: On Why Financial Markets Have Become So VolatileBarry Schwartzhttp://www.blogger.com/profile/15444722309513932798noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7896191028153131182.post-58672766151732784452012-01-04T20:54:12.176-08:002012-01-04T20:54:12.176-08:00I’ve worked as in the securities markets for three...I’ve worked as in the securities markets for three decades and I’m appalled at the quality of the reporting. Why can’t people just say they don’t know?<br /><br />In 1992 I was running an arbitrage desk in Tokyo for a large securities firm. Every day a dweeb from “research” would stop at my desk and ask if I knew why the markets did what they did because he had to file a report that was picked up on the newswires. I always said I had no idea; all I cared about was the spread between the Nikkei 225 basket in Tokyo and the futures in Osaka.<br /><br />One sleepy afternoon we sent an electronic basket of stocks by mistake right at the close and we slammed the market down nearly a percent. <br /><br />When the dweeb showed up I said, “Today I know why the market is down. It was a typo.” <br /><br />He said, “I can’t use that,” and wandered off to find someone who could say with all confidence (and zero evidence) that investors were afraid that given the export driven nature of the Japanese economy the yen might be overvalued (or some other horseshit).<br /><br />I trade a few million shares a day and I can almost never tell you why the markets do what they do, and when I can tell you, nobody wants to know.<br /><br />BTW, what’s needed is not more finance education, but less. See:<br /><br />Against Financial Literacy Education by Laura Willis of Loyola Law School in LA:<br /><br />http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1105384Brooke Allenhttps://www.blogger.com/profile/10939211601610942575noreply@blogger.comtag:blogger.com,1999:blog-7896191028153131182.post-73637447406686138052011-09-13T08:47:40.574-07:002011-09-13T08:47:40.574-07:00I agree with you. I also think that these days, ev...I agree with you. I also think that these days, everyone think they can become an 'expert' or 'specialist' just because they were able to google it. As you mentioned, people create scenarios in their heads that are mostly thinking about themselves (i.e. greedy) shielding the reality of the facts that they cannot fully comprehend because they do not hold the appropriate knowledge - 20 minutes on the wikipedia does not make anyone an specialist of anything... but they still go out there and act on it... and in combination with millions of others, they influence the market. Great blog - thanks.Gustavo Xerelhttps://www.blogger.com/profile/02162833910848993826noreply@blogger.com