“We suffocate among people who think they are absolutely right, whether in their
machines or in their ideas.” Albert Camus - Neither Victims or Executioners As we have seen, it is quite natural for humans to group together due to their sociable nature. In addition, the societies that man has created have reinforced this further. Today we are faced with a society that is becoming even more complex due
to the technological advances of man. This extremely complex and specialised society
has actually meant that we all tend to specialise in particular areas and delegate
to someone else a task we feel we do not have sufcient time or expertise to
concentrate on. For instance, if a computer breaks down we may well consult a
specialist who we feel has the knowledge and experience to solve the problem. Similarly, those with money to invest give it blindly to the so-called experts of the nancial world to invest for them, or follow some learned guru in the media. With the xing of a computer we have a logical problem with a logical solution, and there is a scientic formula to get the desired result. With nance, however, we have an area where logic by itself does not work, and there is no set formula that
guarantees success, so just how good are the so-called experts, and could you do
better? “An economist is an expert who will know tomorrow why the things he predicted yesterday, didn’t happen today.” Dr. Lawrence J. Peter
If you study the statistics, you will nd that the advice of the so-called experts is, on the whole, very poor. Financial experts who are in the media nearly always make their most wildly inaccurate predictions at, or close to, important market tops and bottoms. Remember October 1987 - how many were saying we were entering a
“golden era” for shares, and how many stockbrokers’ fund managers lost in the crash? If you look, you will nd the bulk lost. As we have stated, all the fundamental data, news, computer technology and advanced communications, are not by themselves a recipe for success. Following the crowds is a psychological, not an intellectual, failing. Despite the gloss and propaganda of the experts, on the whole their long-term track records are poor. The Wall Street Journal did an interesting competition in which several market experts were to use their skill and
judgement to pick various shares. They then pitted them against “the monkey”, which effectively was a random throw of a dart at a board. After a period of several months, you won’t be surprised to know the monkey was marginally ahead! There is no need to feel intimidated by the experts, you can compete against them on equal terms and you will nd you beat them with regular consistency. “It follows the more specialised society becomes, the less attention it pays to the discoveries of the mind which are intuitively beamed towards the brain, there to be received only if the switches are ‘on’. Specialisation tends to shut off the wide band tuning and thus, to preclude further discovery of the all-powerful generalised principles”.
B. Fuller - Synergetics
Independent thought is essential to success. Thinking for oneself is one of
the highest privileges granted to mankind, but it is one that we use less and less in modern society. The age of specialisation means that we concentrate our thoughts
in narrow areas we feel comfortable with. This has led to many investors feeling at a disadvantage against the so-called experts and their vast amount of data and sophisticated technology. After reading this you should feel comfortable that you
can compete as an equal. “Whatever you do for the next ve minutes, don’t think of the colour blue.” Neurolinguistic Programming Paradox The rst thing a trader must do before entering the market is to understand our own nature. While we can never remove ourselves from the human race, we can deviate from the norm in certain areas
by having a clear understanding of our strengths and weaknesses. Whilst we are all emotional beings, subject to the impulses of the crowd, we are however capable of individual thought and this will allow us to adapt and change if we wish to do so. The fact is, what can be learned can be unlearned. For instance, the investor who follows the crowd does so through society conditioning and intellectual laziness. Once you understand the logic of not doing so, you can change your behaviour. Similarly, you know that you are an emotional being due to your race. However, again you can learn to control your emotions and minimise their impact by using a disciplined trading plan.
