Mind of The Market

A Non Technical Guide To Understanding Financial Markets

Abhishek Kothari

--

Courtesy: Billy Huynh, Unsplash.com

Risk means “getting hurt when it hurts to get hurt the most” — Cliff Asness, AQR Capital Management

Over the years, capitalism has emerged a somewhat imperfect but longer lasting economic order. Key to the success of capitalism has been the institution of free markets and the economy these markets create. One of the frustrations in learning about finance and economics is the fact that a lot of modern financial literature today strays away from common sense and simple explanations towards a more technical and numerical description of finance. Sometimes, it takes a teacher that can simplify seemingly complex concepts to kindle a love of learning. However, it is upto the student to meet the teacher half way. I will try my best to explain markets on the basis of my experiences with them.

This article traces the origins of markets, provides an overview of present day financial markets, imagines the future of markets and provides solutions to improve markets and capitalism itself to create a fairer and less unequal human world.

What Markets Are All About

There is a small joke you often hear about markets — “ no one can figure out the markets and the weather although not in any particularly order”. My personal take on this statement is that trading or investing was never about figuring out the markets but it was about discovering your own vices as a human and finding a way to be the best version of you.

Many hedge fund managers, stock and currency traders have wrestled with the market and have had periods of stupendous success followed by abysmal declines. There is no single strategy that has outperformed the broader market forever. Ultimately, the market changes it’s mind and a previously successful strategy is turned on it’s head.

However, some have created extraordinary wealth. George Soros, a hedge fund manager, recently donated roughly $18 billion of his wealth to philanthropic endeavors. However, one thing common amongst all of these players has been the fact that their activities in the financial markets forced them to reflect on their character. Ray Dalio, manager…

--

--

Abhishek Kothari

Futurist@The Intersection of Finance, Tech & Humanity. Stories of a Global Language: “Money”. Contributor @ Startup Grind, HackerNoon, HBR