The market is smarter than ever. [Comment from a Trader.]

The market isn't 'smart', it just is. A huge amazonian flow of human consciousness.

There's a danger in ascribing intelligence to this thing, tempting as it may be. For the thought that it's 'you against the market' stems from the ego, a false belief that we are in some 'mano a mano' battle and need to 'outwit' an opponent. All we are doing is outwitting ourselves.

The market does not care about our existance, it just continues. And the best we can hope for is to hitch a ride without being swallowed up in its ebbs and flows.





Speak your mind

4 Comments so far

  1. George Parkanyi on May 7, 2008 8:56 pm

    It's an environment. You either adapt to it or you don't. In the market a few thrive, most muddle along, and many succumb. Sort of like life really — full of interesting creatures and characters.

  2. Arman Agdaian on May 8, 2008 2:10 am

    The market is full of deception; our job as traders is to figure where the deception lies. Fear and greed dictate price action, where is the fear or greed, you need to constantly ask yourself as a trader. I really like short term eurodollars EDH09 at 97.02 to about 97.40.

  3. Ronald Weber on May 9, 2008 5:44 am

    I agree about the concept of loser/winner with a zero-sum environment such as the currency markets, but I am skeptical about it for equity/bonds markets. For the past 100 years the vast majority has been well-served by it (most pension funds, individuals, treasury etc…) and if this wouldn't be the case most investors would have left the market a long time ago. This is by the way what happened in Japan as 20 years of bear market has led most private investors to invest in cash and abandon the market; the only winner/looser left there are the occasional traders, hedge funds and hopeful foreign investors who come and leave japanese equity every year or two!

  4. steve leslie on May 10, 2008 4:55 pm

    Rather than use the word smart, I would rather use the terms efficient and forward looking to describe the market. It is certainly more liquid than it has ever been.

    I have never understood using the word “Smart” anyway in a sentence. Obviously this is connotation that cannot be quantified. It is also dangerous to label someone or something as smart. It infers that others are the opposite whatever that means.

    I think of various ways we ascribe smart.

    A person is smart if they test out with an I.Q. of 130 or better.

    Some assume that a person is smart because they are in a certain profession such as Doctor, Lawyer, Ph.D., Judge, Politician, Executive.

    Some think that celebrities are smart.

    A person must be smart if they have a certain income or net worth. Warren Buffett must be the smartest man in the world.

    A person is smart if they are of a certain social status.

    A person is smart if the are on television or radio or in movies.

    A person can be smartly dressed.

    Here is a list of some other “smart” things according to a google search:
    smart bombs
    smart cards
    smart drives
    smart cars
    smart growth
    smart chicken
    smart pointers

    There are others but I think the point is made at least to the smart people in the room.



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