Wondering why the markets have gone tits-up?

This in yesterday’s Telegraph:

Jim Porter (not his real name), chief technical analyst for one of the largest banks in Britain … uses heliocentric astrology to predict the direction of the international financial markets.

Millions of pounds’ worth of commodities, shares and currencies are traded on his command. His decisions may affect the values of your pension and your home, and perhaps decide how long you hold on to your job.

It’s hardly surprising that the world’s markets are in turmoil, with chumps like this in charge! The problem is that markets are inherently unpredictable, and city analysts daily take high stakes gambles – with the success or failure largely outside of their control.

It’s a profession where superstition is likely to thrive. Numerous studies show that supersitious behaviour increases alongside the ‘desire for control’. As The Guardian has reported:

Ask a psychologist, a sociologist or an anthropologist what makes us superstitious – why we queue in market towns for tarot readings, why we fill in our lottery tickets with the same lucky ballpoint every time, and risk back injury avoiding the cracks between paving stones – and they will tell you the same thing. When people feel that they have no control over events, they will suspend their belief in the rational and step into a world where the rules seem more flexible.

Refs:

• Case TI, et al. Coping With Uncertainty: Superstitious Strategies and Secondary Control. Journal of Applied Social Psychology 2004:34;848–871 doi:10.1111/j.1559-1816.2004.tb02574.x
• Rudski J. The illusion of control, superstitious belief, and optimism. Current Psychology 2004:22;306-315. DOI 10.1007/s12144-004-1036-8
• Keinan G. The Effects of Stress and Desire for Control on Superstitious Behavior. Personality and Social Psychology Bulletin 2002;28:102-108