Nerves of Dubious Quality

Quantum mechanics, The Tree of Life, women and finance are amongst the most difficult things to understand that I’ve encountered in my life so far. As someone who’s had a hard time understanding anything remotely financial, I always held finance people in high regard. Sure, they were earning obscenely high amounts of money that most people felt they were undeserving of, but I’d always figured that if anyone could actually comprehend all that financial mumbo-jumbo, they were worth all that money. In any case, if you were in finance, you always seemed to be studying and giving all manner of exams for certifications that sounded truly serious and weighty – so perhaps all that money you earned was in some way compensation for the lack of a life otherwise. If you wanted to spend a lifetime studying and didn’t care much about the money, academia was your career of choice. But if you wanted to spend a lifetime studying, and be richly rewarded for all the trouble you went to, it was either finance or law.

The blind assumption that the finance sorts were supremely intelligent humans, though, is something that I’ve started to question whenever I read anything related to the stock markets, and my worst fears have now been confirmed with stock markets all over the world crashing over Brexit. The reality is that the finance people are not the smartest in the world; they are simply the most nervous in the world. From my limited understanding of the stock markets, here’s how it works: If you’re happy about something you go about buying shares, and if you’re sad about something, you go about selling shares. After doing this for a decade you either get very rich, have an apartment in Manhattan, a yacht in Monte Carlo and a lifestyle disease; or you get very poor, still have a lifestyle disease and are out on the streets scraping through dustbins for your next meal.

Coming to Brexit, it seems that all the finance types expected Brexit to not happen. They were so thrilled with themselves about this that they decided to go out and celebrate by buying a whole lot of shares. And now that Brexit has happened, they’re a panic-stricken bundle of nerves running about like headless chickens selling these shares left, right and centre. That just doesn’t make any sense, does it? It’s like printing the invitations to your wedding when you haven’t even started dating. And what was the rush to buy all those shares? If Brexit were anyway round the corner, wouldn’t any normal person just wait a few more days and then decide? 

Now, a lot of you might think that Brexit is a huge deal, and it’s only natural that the financial markets react to such a big development in the political and financial world. And I would’ve been fine with that if it was just Brexit that led to the nervousness – but the stock market guys are always nervous, aren’t they? It’s not just the big recessions or financial crises – every political announcement, every time interest rates are changed, every time interest rates are not changed, every by poll in every obscure constituency seems to make the stock markets nervous and collapse in a heap of panic. I can’t think of a bunch of people that get as nervous as often as the stock market guys. The entire financial system seems to be based around getting together the most nervous bunch of people you ever came across, handing them all your money and saying “Here, buy and sell shares as you please”.

Perhaps all those exams and certifications that the finance people write are not full of questions regarding the economy and derivatives and PE ratios and all that, but instead look like this:

Exam for Aspiring Financial People Who Buy & Sell Shares & Determine the Fate of the World Economy

1. The US has just had an election and voted in a Republican government. Will you:
1. Celebrate because you’re fond of right wing policies and feel they might benefit trade with India.
2. Be disappointed because your political leanings are more left liberal.
3. Not be affected as it doesn’t truly affect you in any way, plus you’ve started seeing this shrink who’s told you to be Zen about such things.
4. Get very nervous and sell all your shares.
2. Beyonce has delivered yet another number one hit and her new song is the rage at all parties. Will you:
1. Rejoice as Beyonce has just the kind of foot-tapping dance music that you love, and sometimes even writes vaguely feminist lyrics.
2. Rave on about how music isn’t what it used to be and how it was so much better in the 60s and the 70s.
3. Not be affected too much as you can always download stuff you like anyway.
4. Get very nervous and sell all your shares.
3. Tanmay Bhat has yet again said something in poor taste about another eminent personality. Will you:
1. Join the chorus of outrage and loudly condemn Tanmay Bhat and wish ill upon him.
2. Jump to his defense because you believe in freedom of speech and are appalled by people taking the moral high ground.
3. Not be affected too much as you know this will all be forgotten two days later when Salman Khan says something even more daft.
4. Get very nervous and sell all your shares.
4. Pluto has just been stripped of its planetary status. Do you:
1. Break into a celebratory jig, as you were always suspicious of Pluto being a planet because of its unusually inclined orbit.
2. Break down in tears, as Pluto was your favourite planet because it shared its name with a cartoon dog.
3. Not be affected, as you’re no longer in school so you need not remember any of this anyway.
4. Get very nervous and sell all your shares.

As you may guess, it’s only if you answered D for every single question that you would pass the test. After all, Spiderman’s uncle may have said, “With great power comes great responsibility”. But in the financial world, with great power comes great nerves.