The ‘Quants’ In The ‘Robots’ – Deprogram Yourself by Notes From The Rabbit Hole
The title of this article is not an assumption that you, astute reader, are little more than a robot following the direct and implied commands of other robots when trying to make logical sense of the state of modern financial markets. Personally, I have found that I need to stay on a path of post-deprogramming maintenance in order to stay right with a complex market backdrop.
On an inward-looking basis, we as investors and traders are faulty humans going up against robots (Ref. Rise of the Quantitative Robots) that are much smarter than we are with numbers, with data mining and with extrapolation. What do we have, pu ny little human brains with all associated biases, ego distortions and other faults? Yes, that is us.
We can mitigate these things by committing to double check our egos, first and foremost making sure we realize that we will err, we are not the best there is and the market does not care even one little bit about us. We can commit to being the best ‘me’ we can be.
This leads me to a more outward-looking issue that I have noted with much gall over my nearly 16 years in this public realm. I often make fun of the clown show that is our main policy-making body, but I reserve the real displeasure for the charlatans, quacks and promoters who make a business out of manipulating other peoples’ viewpoints to the tune of financial gain.
Indeed, the idea for this post came into my head this morning while I was accepting a LinkedIn connection invitation and was treated to a menu of other people I might like to connect with. Up popped a young lady who works in the marketing department of “XXXXX Financial”. XXXXX is a vast financial newsletter empire that I am sure most of you have heard of, and I have seen scores of company employees pop up in the past. I had two thoughts; 1) ‘Why are there multitudes of employees from this newsletter company on LinkedIn?’ and 2) ‘Why are so many of them in the marketing department?’
The answers are obvious, I agree. It takes a lot of people power to constantly get in front of new , err, prospective clients. This marketing muscle comes in the form of those alarming bulk emails we all get teasing us to click a link and find out how we can protect ourselves from the ultimate doom that the forces of evil have in store for us and it comes in the form of legions of proof readers, copy writers and editors finalizing the work of the analysts in order to make it fit the mold of what sells most readily. I know this because I saw a job ad on LinkedIn for an editorial opening from this company with a job description that included fixing sometimes illegible grammar, muddled analytical conclusions and forming the work into marketable, easy to understand formats.
The stuff noted above is real cartoon stuff. I don’t think many readers of nftrh.com, biiwii.com (it’s back by the way) or most sites you may read my work on take such dullard but effective marketing techniques seriously. But a wise individual will double check not only herself, but also anyone who would profess to be worthy of disseminating financial advice or other information. That includes old friend Biiwii/NFTRH because I myself have put a premium on trying to get myself clear of my biases over the years. It is an evolving thing, you don’t just change who you are. You take your best, most skilled and most honest attributes and don’t be shy about them, and you (sometimes very publicly) admit your failings, wrong-headed assumptions and flat out weaknesses.
I first came into public financial market writing because early last decade I was near-traumatized by someone who had worked on Wall Street, had doom and gloom to burn and held views so extreme it altered my perception of reality. In short, it felt like I was in the grips of a cult so I got out of there. This individual demanded I buy gold, eliminate debt and prepare for very hard times because the system’s gonna blow!
Well, it’s 12 years later and that would have been an inconveniently long time to be in a bunker. I am thankful that even then I took some good advice but also filtered out what I did not need. I started biiwii.com (but it is what it is) in 2004 as a way of stating ‘reality over bias’ and while at first I thought that would be in reference to negative financial realities (they were and still are, in my view) a big part of it ended up being the reality that the world was not ending, the stock market was bulling and an even keeled attitude was needed.
To this day I am sure I bore some NFTRH subscribers by going on about patience, perspective and emotional balance. But these are the things I’ve learned and any of us, if we are being honest, are only the sum of what we have learned. The markets are a patience play, for we non day traders at least. The opportunities will come but they appear only after careful analysis has brought us intact to a point where that opportunity can be realized.
Too much public analysis either sounds alarm bells, tugs at emotional greed or worst of all, goes all robotic in plying its trade within a certain set of assumptions that should have been acknowledged as wrong long before (ref. gold bug denial at the behest of sloganeering, propaganda and even confidence, well into the bear market).
Hi, my name is Gary and I have been wrong before; publicly so. “Hi Gary, get over it and move forward trying to learn from your mistakes and give a straight scoop even if you are not the most interesting writer, don’t offer the most tantalizing prospects and are perhaps a little too conservative for this business that respects risk-taking heroes.”
Okay, thanks guys. That is who I’ll be.
This gives some background about why I may sometimes come off like a… dick, as we say in Boston. I literally want to throw up in my mouth every time I see material billed as financial analysis pulling at peoples’ emotions, like greed and fear. You know, the two oldest and least manageable human faults in play where financial markets are concerned. I also get disturbed when analysis comes off like it’s got all the answers and that readers should be professed to.
All I can tell you at the end of this thought exercise is that each of us, you me and the guy down the street, need to deprogram and reset on occasion because the macro market backdrop like the world itself, is in constant motion and subject to change. The ‘quants’ in the ‘Robots’ article linked above have code that can change with events. You and me? All we’ve got is bullshit detectors, analytical tools of our choice and a hopefully honest orientation.
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