MICHEL PIREU: Free verse of financial markets creates a maze of randomness
There must certainly be a vast font of stupidity in human nature, else men would not be caught as they are, a thousand times over, by the same snare, and while they yet remember their past misfortunes, go on to court and encourage the causes to which they are owing, and which will again produce them. — Marcus Porcius Cato (234-149BC) In his book, Seeking Wisdom from Darwin to Munger, Peter Bevelin summarises the forces that influence and set the limits for our judgments. One of those is what he calls randomness. "Handling new challenges is a means of adaptation," says Bevelin. "The consequences of our actions reinforce certain behaviour. If the consequences were rewarding, our behaviour is likely to be repeated. Rewards can be anything from health, money, job, reputation, family, status, or power. In all of these activities, we do what works. This is how we adapt."But it’s not just what happens to us that counts, it’s what we think happens. When we face a situation, our brains creat...
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