GOVERNED BY IGNORANTS
Or, how not to allow Perception to become the Reality.
Was watching Cnbc this morning and there was this Secretary- type on and he was holding forth on the Rupee. Now, since this is a topic that is close to all our hearts at the moment, I un-muted the volume to listen to him. Among the several things he said, there were two statements that this gent made which were quite astounding. Discussing the Rupee moves in the market, this man (a VERY senior official) says- with complete certainty and an almost disdainful look on his face, “Market sentiment is not indicative of anything and they are quite unjustified”. Nothing wrong with that statement, one may think. After all, doesn’t it seem to us that the market is “ overreacting” , as also being helpfully suggested by even the likes of the FM and the PM. They should know, right? After all, who else can know the true value of the Rupee than those two people?
But is it really the fact? Would what the FM or PM think matter or would what they Do about the problem matter? Answer is self- evident isn’t it? Going back to the aforementioned Banking official, further into the interview he goes on to say, “I am personally hopeful of things becoming better. Hopefully we will move towards correction.” Look at the choice of his words. He is using words like “personally” and “hopeful”. Where are those really? In his bloody head!! Does the market care a whit about what is his personal opinion? Or does the market even know what this man “hopes” for? Answers to those two questions too are self-evident.
But here we were, with the reporter of the channel thinking she had got some really great quotes from such a high ranking official about the state of the Rupee and what is going to happen to it. Personal opinion, no shit! Hopeful of a correction. No kidding! And the reporter doesn’t have a clue that what he got was utter bilge from someone who is actually clueless about reality. The MARKET is where opinions are traded with real positions and real money. They are not some place where you sit in a nice chair in an air-conditioned room with a nice looking girl reporter smiling down at you as she asks the question. These Secretary- types have absolutely no idea about the surge of adrenaline, the pumping of the heart when either profits or losses occur, the elation of getting a move right or the depression of seeing a position blow up in your face.
It is easy for such people, so far removed from the action, to make statements like the one above. They don’t understand that the Market is the Reality and everything that they think and feel is all Perception. This banking official is clearly taking his perception and making it the reality. How distorted is that? Most times this is what traders also do. Hence it is essential that we have a tool that tells us all the time what the reality is. And that is your chart. Think about it. Even those that do not know technical analysis. A chart says what is true because it records what is happening. There is no ‘personal’ opinion in there and no ‘hopes’ of what will happen. Those are colors and shading that we add. It is the one reason why I remain attached to my charts. It is also the one reason why I am appalled by the comments of this senior banking official. We are governed by the ignorant. Small wonder then that they are clueless about what to do.