Diary of a Financier

Bookshelf Update: Nature, Not Naivety in Financial Markets

In Bookshelf on Thu 3 Feb 2011 at 01:38
  • Adding Kent Thune’s latest article from The Financial Philosopher to my Bookshelf.
  • Reminding me of Taleb, it’s a thoughtful, existential, and fundamental reduction of financial markets.

Just a quick note that I’m adding Kent Thune’s latest article, “Understanding Markets: Nature not Naivety or Narcissism,” to my Bookshelf Newsstuffs. I recommend it as a quick read.

Mr. Thune, “The Financial Philosopher,” always has an existential undertone to his thoughtful work. He echoes a point that I’ve made so often:

Studying the past, for the purpose of preventing the tragedies from reoccurring again in the future, may be responsible and even noble but it is inevitable that other similar tragedies will occur. Just as sure as one can be that there will be more hurricanes, famines and wars in the world, there will be another market meltdown in the not-too-distant future. How might we prevent it? We cannot and we must not; because the nature of financial markets is a part of nature itself–human nature–and there is no prevention: There is only observation, postulation and acceptance…

Complaining about human nature yesterday and today, and expecting a different outcome tomorrow, is no more wise than banging one’s figurative head against the metaphorical wall of human nature. It is a naïve view of man to expect man not to be naïve.

Fools will be fools. Man will be man. Humans are fallible. Cycles are a part of life.

I’m working through Nassim Taleb’s Fooled By Randomness right now, and I find a lot of commonality between the philosophies of Messrs. Taleb and Thune. I have more to come on the former (Bookshelf Update!) once I finish his book.

–Romeo (hattip Barry Ritholtz)

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