A fascinating point from the FT Weekend

I tend not to read the papers as a general rule: too much doom and gloom. However I do make time for the FT Weekend edition.  Whilst perusing this weekends edition (Sat/Sun April 10/11th) in my local coffee shop yesterday I came across a fascinating commentary by Gillian Tett (a well thought of and highly respected FT Journalist) on page 9 titled ‘ The emotional markets hypothesis and Greek Bonds . What caught my eye were the following comments:

” In the genteel surroundings of the Great Hall of Kings College, Cambridge, dozens of the worlds leading economists conducted an earnest conference on the future for economics partly funded by Soros’ $50m largesse.

One of the central conclusions of the day was that economists and market traders alike need to devote far more time to human psychology, rather than just the raw economic numbers beloved of many policy wonks.”

I found this fascinating.  Devote more time to human psychology rather than just raw economic numbers?  So they need George Soros to spend $50million to bring the brightest academic minds together for them to come to a conclusion that old George would have known long ago anyway!  They could have just cut out all the time and effort and just given any experienced trader a call and they would have got the same message.  But I suppose they all had a nice day out in pleasant surroundings and probably had a very nice meal washed down with a fine wine.  Nice work if you can get it I suppose.

I wonder how many of those ‘world leading economists’ have actually ever placed a trade?  And I don’t mean phoning their stockbroker to buy some shares in some hi-tec company one of their students has created.  But actually sat in front of a screen and made an intra day trade risking their own money?  Actually felt the emotions of fear & greed, hope & despair as their position swung one way and then the next. They would soon realise (as most experienced traders already know) that markets are not rational because the people who make up markets are generally not rational.  I would draw readers back to the commentary from Paul Tudor Jones I posted here a few weeks back.  I’ve yet to find anyone give a better view.

Rant over. Trade well,

FXTrader Paul