Posted by: stillironic | November 8, 2010

Finance Theory or Outfoxing a Guppy

If you’re in the mood for a few laughs, I recommend looking into financial history.

Actually, investigating the origin of the word “finance” itself is worthy of a smirk or two. You have “fin,” a body part that keeps sharks on target for the kill. And “nance,” a slow-growing shrub, whose branches can be, quote, cut into small pieces and thrown in streams to stupefy fish, unquote. This is most informative; outfoxing fish is a predicament we all face from time to time. I would be reluctant, however, to apply this technique when laboring to outfox one of your larger sharks.

shark

Shark unsuitable for stupefying or outfoxing

The history of finance is full of many similar illuminating facts. Such as: “Much of economic and financial theory is based on the notion that individuals act rationally and consider all available information in the decision-making process.”

And: “Mounting evidence suggests that investors sometimes act irrationally.”

Which begs the question: How high will evidence have to be mounted to push the afore-mentioned “theorists” into believing it demonstrates investors sometimes act irrationally? Are we talking as high as the Empire State Building? As high as Everest? As high as the distance between Earth and the Ursa Minor Dwarf galaxy? This discussion could become totally irritating with the insertion of metric measurements. The topic, the history of finance, however, is irritating enough.

What were economic and finance theorists thinking?

Are theories of aging based on the human body staying young forever?

Are theories of drug addiction based on people having no tolerance for addictive substances?

Are theories of intelligence based on all humans possessing a high IQ?

metric conversion chart

Metric system: Almost as irritating as history of finance

Imagine medical theory based on the human body never aging, getting sick, or being injured. That would pretty much limit MD specialties to plastic surgery and obstetrics. Few people would aspire to practicing medicine. Doctors might even be considered leeches on society. Like lawyers.

When people got sick or injured, they’d summon the local barber. When he wasn’t attending conferences at posh golf resorts. The mentally challenged of rational mind would seek out a philosopher; the irrationally inclined would visit a psychic. Wars would be fought over rational and irrational beliefs. World population would be at medieval levels; even the most skilled barber is no match for plagues and pestilence.

Even more disturbing, House would have to diss his team and their differential diagnoses between cutting hair and hawking Brylcreem.

The Three Stooges

Having failed to stupefy a guppy, these finance theorists are in deep thought about how to outfox it

Wake up economics and finance theorists. With your stupefying premise of rational and fully informed decision-making, you’d have trouble outfoxing a guppy in a fishbowl.

guppy

Guppy in no danger of being outfoxed or stupefied

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Responses

  1. There really should be basic money-handling classes taught at the high school level. No one teaches you anything about finance unless you go to college specifically to learn it and then you become one of the aforementioned “theorists.”

  2. Hi Jayne!

    There’s a lot of talk about teaching personal finance classes at the high school level. Only 13 states mandate it for graduation. Not all states mandate an economics class, which could make it easier for people to understand that extreme income inequality isn’t good for anyone in the long run.

    Ginny

  3. Ginny, thanks for stopping by my blog and leaving a comment.
    It seems that more and more people today find themselves in a financial bind because they seem to live for the moment.

  4. “Much of economic and financial theory is based on the notion that individuals act rationally and consider all available information in the decision-making process.”

    Exactly what Moe said when he caught me by the Curlies at the abrupt end of my fling with Mrs. Moe. I didn’t mind: She never did get my name straight and kept calling me “Larry” at the most inappropriate time.

    • Still blushing at the image! I hear Mrs. Moe was a handful–twice the size of the Mr. and 4 X the fun. Speaking of, is it true you had an amorous rendez-vous with each of the three Mrs. Tons O’ Funs?

  5. Oh, man, were those triple bunk beds ever fun!


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