When you switch on the TV to find that someone was watching channels such as Bloomberg, NSBC, etc, where they place a heavy emphasis on “analysing the markets,” do you carry on watching and do you come away with some useful information you can actually use when you’re done? The same applies if you intently watch those channels as well as the business news or markets analysis segment of the news – do you really understand what the analysts are talking about?
Economists are somewhat of a protected species because you can get predictions as to which direction the market is going to move wrong and yet still earn a pretty penny as an analyst and as a renowned analyst at that. Economics was never meant to be an exact science, leaving the door open for those who are in the know to come away with some serious profits if they play their cards right and milk the various financialisation channels we’re in a sense all forced to patronise.
To give you a very simple example of what I’m on about, if an economist decides to go through the process of getting accredited to operate as a broker, once fully qualified and accredited they can make money regardless of the accuracy of their predictions of what the market is going to do. Your broker charges you what is effectively a brokerage fee, whether this brokerage fee is levied directly or indirectly. A direct brokerage fee would be one which is explicitly defined as such, such as paying for each trade you make over a certain trading platform, while an indirect brokerage fee would be one where you pay for the spread when you open a trade over that trading platform, i.e. if you want to buy a position on a certain stock, you don’t pay the price at which the market indicates that stock to be trading, but rather pay the price which is somewhere between what the last average sale price of the stock was and how much buyers are willing to pay for it.
If this was all done directly between buyers and sellers, we’d get a bit more of a clearer picture of what the true price of stocks are, but then that would be too easy and there’d be no need for brokers.
What I’m getting at is that information which is largely available to the masses, such as the broadcast analysis of some economics experts together with the news panel of channels such as Bloomberg and NSBC, isn’t really information you can just use as is and make a business decision that will make you a lot of money on the spot. You need to focus on the stats that matter because when you do, you realise that something like the stock market pales in comparison to the likes of perhaps trying your luck with a Columbus slot game online. At least then if you win or lose you know exactly what factors contributed to your win or loss, as is not the case with betting on the movement of stock prices.