Why Unpredictability is Big Business?




"Your entire future reaches you one day at a time."


If there is one thing that is directly proportional to unpredictability, then it would be fear. And if there is one thing that demonstrates fear among the masses, then it would be the Capital Market Sentiment. A market crash is nothing but the reflection of fear inflicted in the investor's mind due to the unpredictable future they foresee.


The world market collapsed with the advent of the Corona Virus. Nobody knew what to anticipate and how long things would be bad. The virus started getting bad, and people began to die across the globe. The whole science community were working on war footing to find a cure.


Although the cure was a distant dream, more information about the virus and its way of functioning started to spread out. Interestingly the corona was still there, and the first peak was yet to get established, but the market began to recover. The recovery was perhaps the sharpest one could have ever witnessed in history.


Now, let's get to the more exciting aspect, the second wave. The second wave was more devastating, and unfortunately, it attacked even the young population, which was not the case in the first wave. Lockdown got implemented across the world just like the first wave, but it was interesting that the market never lost its ground. It went higher and higher. Some say it's the courtesy of, vaccination but I would say that the virus, just like numerous other factors, became predictable to people.


Fear would always be about the unknown. The Coronavirus is no more a fear, at least to the relentless Indian Capital Market. I am sure there is a lot to attribute to this Nifty splurge which is beyond the scope of this blog.


"Humans are pattern-seeking story-telling animals, and we are quite adept at telling stories about patterns, whether they exist or not." ― Michael Shermer


Scientists and Astrologers


"You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life."- Steve Jobs




Unlike most of us who are paid for what we know, scientists get paid to think about what they don't know. They research to arrive at something which never existed in the first place. If someone has to ask the right question, then it would be, why are they even needed in the first place? Humankind wants to ensure that their future is secure to arrive at something to fight the unknown that might come later.



Well, science is not enough for everything. We do need astrologers as well to ascertain that our future is on the right track. Some astrologers believe their work is based on planetary positions, and therefore there is science involved in their work. Like a parrot picking a card, some believe nature's pattern is in sync with a person's future. All said and done; these astrologers make a living out of one's insecurity about the future. They not just foresee a future but have redemption strategies in case of any shortcomings foreseen in the future.


So technically, as long as humanity survives and their fear resides within him about his future, these two professions will never go out of business.


If one thinks the fear is only for the individuals, then trust me, companies fear more. They hire business consultants and pay them heavily to make sure they never go out of business in the future. It's a different story that some of these CEO's utilise the services of the astrologers too.


"Nobody wants a prediction that the future will be more or less like the present, even if that is, statistically speaking, an excellent prediction." ~ Nathan Myhrvold



The Market Forecasters


"Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." ~ Peter Drucker



Whenever I witness the so-called market experts on the television, I tend to remember my finance professor during my MBA days. He was a person who took his job pretty seriously. He had this notion of making simple things grander, and we end up more confused than convinced at the end of the class.


The so-called jargons make them sound intelligent. The utility of the term profit booking instead of market fall gives a clear picture of the sophistication of the subject they are brood into.


Economists are about as useful as astrologers in predicting the future (and, like astrologers, they never let failure on one occasion diminish certitude on the next)." ~ Arthur M. Schlesinger, Jr.


It is interesting to note that we live in exciting times where every tom and harry have their opinions. It is irrelevant how qualified he is to give an opinion as long as his subjects don't bother that.


Take the recent example of the Bitcoin revolution. The crypto market is just evolving, and nobody has no clue about that, yet everyone wants to get a share of the pie. This led to the rise of laymen who is nothing but a layman who has his opinions on crypto and has a camera phone to shoot his video. On a personal note, I believe anything is possible in the future. When dilapidated jeans become the new elite fashion, then why not the homemade coin the new national currency?

What are the Odds?

"A prediction is a prediction because it's predictable." ~ Robert Kiyosaki



Prediction, most of the times, it's heads or tails. Sometimes it's an up or down. To put it all together, it ends up as success or failure. So, outright the predictor has a 50% upper hand even before the prediction. It's not just for the predictor but for you too.


However, what the prediction may be, humankind wants to hear what they believe in. Even if they are informed about the possibility of 99 per cent failure, their mind hopes on the remaining 1 % more than conditioning it for the more practical 99%.


It's the same for the professionals too. A statistic says that "63% of doctors overestimate their patients' survival time.


One interesting to note is that the future is a relative term. Any prediction about the future is never complete until and unless a prescribed time limit is detailed. Most of the times, the man never lives enough to witness the whole pattern evolving in his little life.


"Foresight is not about predicting the future; it's about minimising surprise." ~ Karl Schroeder


What about Nostradamus?



"The aeroplane will never fly." ~ Richard Haldane, 1st Viscount Haldane





Nostradamus might have got something written somewhere, which somehow got related to something somewhere. This might be the start of something which somehow got somewhere for us to take note of it.


The pattern is seeing what you want to see. Personally, I don't believe in miracles as I firmly believe we as life is a miracle in this lifeless, timeless universe.


I can strongly proclaim that nobody can claim a future proof design. If someone claims it, then he is in an illusion. If you want to design something idiot-proof, the universe will design a better idiot.


Conclusion


"If you want to be happy, do not dwell in the past, do not worry about the future, focus on living fully in the present." Roy T. Bennett

Man's brain constantly craves certainty and autonomy. When our need for certainty and autonomy is satisfied, we experience a strong sense of reward. This sense of reward is addictive.


Humanity always seeks to find patterns that never exists in the first place. Whether it's the share market or life's decision. Sometimes we get stuck in patterns or reoccurring themes in our lives that require a shocking epiphany to allow us to see new possibilities and notice the obstacles that keep us from moving on.


Planning our lives with this fear of the future doesn't leave much room for unexpected opportunities, and yet life is full of the unexpected. You have no idea what's going to happen tomorrow, but that isn't a bad thing. You might find something that will lead to an opportunity you never expected. Rather than fearing the unpredictability of the world, use it to your advantage. Unknown situations may lead to something amazing.


Fear is always for the unknown; either reduce the unknown elements in your life or become unpredictable yourself.


"The best way to predict the future is to create it." Abraham Lincoln