It's NOT intuitive.

Discussion in 'Psychology' started by BlueTurtle, Dec 8, 2012.

  1. I think a good percentage of people want to be able to read, analyze, and add value to a particular topic. Example: Read about football, study the offensive line, and say something that sounds intellengent to others. Of course this will imply you know the outcome based on facts you decided to look at. most of the time it doesn't work....

    The reason, like with trading/economics, is that it is NOT intuitive.

    If it was, then either Marx, Keynes, Hyack or whomever, and others would not be debated to be right or wrong. If it was obvious, there wouldn't be a big discussion. Maybe the Fed didn't print enough, maybe they arn't printing enough now, and maybe we are simply not given all the information to really say how bad the US ecnomy is (which many like to do). But it sounds dumb to say, "I don't know".

    Same with technical analysis. It's not intuitive.

    Same with fundamental analysis. Oh, it seems so cut-and-dry, but systemmic risks and other factors are not known at all times; moreover, how can we know what % is priced it.

    all i'm saying is forget trying to be the guy who knows where the economy, markets, etc....are going.

    if you want to be profitable, forget thinking about stuff that you know can't be rationalized. forget the economy, everything......

    i think trading is either 90% doing nothing, 10% trading big size...

    or picking one stock, putting on a few thousand shares+, and risking money you can afford to lose.

    but being the "smart guy in the room" will cost you everything...

    buying an ETF in an ira is another topic entirely....
  2. very good point. we see that all the time. . people acting as if they know everything but they are not even in the market..

    it's funny when people act so smart that they can't even communicate well with others..

    "In 2008, experts predicted gas would hit $20 a gallon; it peaked at $4.10. In 1967, they said the USSR would be the world's fastest-growing economy by 2000; by 2000, the USSR no longer existed. In 1908, it was pronounced that there would be no more wars in Europe; we all know how that turned out. Face it, experts are about as accurate as dart- throwing monkeys. And yet every day we ask them to predict the future- everything from the weather to the likelihood of a terrorist attack. Future Babble is the first book to examine this phenomenon, showing why our brains yearn for certainty about the future, why we are attracted to those who predict it confidently, and why it's so easy for us to ignore the trail of outrageously wrong forecasts.

    In this fast-paced, example-packed, sometimes darkly hilarious book, journalist Dan Gardner shows how seminal research by UC Berkeley professor Philip Tetlock proved that the more famous a pundit is, the more likely he is to be right about as often as a stopped watch. Gardner also draws on current research in cognitive psychology, political science, and behavioral economics to discover something quite reassuring: The future is always uncertain, but the end is not always near."
  4. I think economics is actually quite intuitive. Problems in understanding or application typically arise when one isn't aware of the assumptions and value judgements implicit in one's theoretical model. One person can propose an economic system to maximize production and efficiency in the long term while another is more concerned about e.g. 'social justice,' which is inherently subjective anyway. Both proposals may be 'right' in terms of achieving the set goals, even if the prescriptions themselves are radically different.

    Trading is a much different animal as the problem isn't really about understanding the processes at work on some kind of intellectual level, but rather about competing with and beating out other market participants to find an edge. There are many books and other resources which describe the former in considerable detail, but actual tradeable profitable edges are few and far between - especially of the idealized sort most people are looking for i.e low drawdowns, high win rate, large % returns, consistent steady drumbeat of available good trades every day/week/month, minimal operational or infrastructure hassles, minimal tail risk etc. etc.