It ridiculous, when you come to think of it – I am, at present, working at a bank, with the stated purpose of learning something about the corporate sector of finances, so that when I graduate with a BSc. Economics, I’ll actually have some practical experience to go with it. I’ve been working here just about a week now; what have I learned?
Well, for one, I now know how to trawl through the BSE and NSE websites looking for information on companies that my bank might want to target as future customers. It’s awe inspiring, the sheer volume of data available to the average bunty. Being an average bunty myself, it’s strange that I’ve never thought to use it for my own benefit until now. Of course, one of the things preventing the average bunty from going ahead and making a killing on the stock market from all this seasonal data available on the animals that romp through this particular forest is that all the information is presented in a manner most conducive to causing a mind numbing headache. Then comes the technical jargon – take this line, for example:
“Operating margins increased to 17.20% during the quarter, a rise of 1318.92 basis points compared with the corresponding quarter”
Yes, fine, absolutely beautiful. Now, what the hell is an operating margin? What is a basis point? What is the corresponding quarter that this quarter is being compared to? For that matter, what in the name of all that’s small and twinkly is a trailing twelve month basis?
It’s the mystique of the craftsman, is what it is.
In the early 1900’s, America was going through a massive reconstruction of its industrial sector. Mass production, in the vein of Henry Ford, Taylor, and all the rest was yet to come – unfortunately, there were significant bottlenecks in the way of this progress. One of these particular bottlenecks (for that is how they saw it), was the control that the experienced worker, the craftsman, had over the production process. After all, there is a significant difference in experience between one who has completed a decade long apprenticeship in order to learn his craft, and some twerp hired off the street who has trouble differentiating his arse from his elbows. If the task is complex enough, the craftsman has almost unlimited control – after all, it’s his experience going into creating the product itself. Therefore, the final authority rests with him, rather than the man with the money.
Skill valued over money. A master carpenter is worthy of more respect than an inexperienced millionaire. What a fascinatingly beautiful concept.
Anyhow. No sense crying over marginalised carpenters, I suppose. To get back to the point, though – since these workers had so much control over the production process, and therefore could stonewall their employers whenever they wanted to, a problem began to emerge. Since the industrialists who set up these manufactories wanted the highest possible returns on their investment - for that is how they saw the situation, in the black and red of a balance sheet – they chose to do so by reducing their costs as much as possible – including worker costs. Fair enough, I suppose. I’d probably not do much different.
Taylor, though, was the nut who set the wheels spinning, in his analysis of the production process. In his view (that of an engineer and a financier), he saw the problem as a battle for power between the workers and the management. Since the power was pretty much balanced (the money on one side against the skill on the other), the situation was deadlocked. Solution? Simplify the production process until any jackass off the street could do it. Result? Mass production, mass consumption, retailing, credit facilities, consumer banks, Wall-mart, K-mart, personal vehicles – the whole fabric of the economy.
What becomes really interesting is to see the differences in the weave of the fabric in different countries.
Germany, for example, considers the skilled worker essential to the production process – they don’t see it as a one sided battle for power. Management is as responsible for worker satisfaction as the workers are for production levels. An equitable balance of responsibility and power.
Japan takes it one step further – the company is your family. Literally. The turnover for workers in Japanese companies is almost nil – before a worker is asked to leave – not fired, asked to leave – every effort is made to find a department/position where the worker can fit comfortably and contribute to the process. Kind of like a beehive, without the wax combs and dripping blobs of honey.
However, to get back to the main point. The stock market, the average bunty, and the internet. There are many reasons why the average bunty would not make money, besides the fact that he might not understand just what the website is telling him. He might not have a large enough bankroll to support himself. One mistake might cost him all his money, and therefore make this option undesirable. The effort of tracking stocks day in and day out might not be something he’s willing to contemplate.
It all comes down to the apprenticeship in the end. While serving as an apprentice, there is a lot more being taught besides the theory and bald practical application of these concepts. There are tacit skills, subtle shortcuts, different styles of working things out…all things that one gains over years and years of watching a master at his craft – which in the end, is more valuable than money itself.
Like they say – light a fire for a man, and he’s warm for a night. Teach a man how to light a fire, and you burn London down.
Well, for one, I now know how to trawl through the BSE and NSE websites looking for information on companies that my bank might want to target as future customers. It’s awe inspiring, the sheer volume of data available to the average bunty. Being an average bunty myself, it’s strange that I’ve never thought to use it for my own benefit until now. Of course, one of the things preventing the average bunty from going ahead and making a killing on the stock market from all this seasonal data available on the animals that romp through this particular forest is that all the information is presented in a manner most conducive to causing a mind numbing headache. Then comes the technical jargon – take this line, for example:
“Operating margins increased to 17.20% during the quarter, a rise of 1318.92 basis points compared with the corresponding quarter”
Yes, fine, absolutely beautiful. Now, what the hell is an operating margin? What is a basis point? What is the corresponding quarter that this quarter is being compared to? For that matter, what in the name of all that’s small and twinkly is a trailing twelve month basis?
It’s the mystique of the craftsman, is what it is.
In the early 1900’s, America was going through a massive reconstruction of its industrial sector. Mass production, in the vein of Henry Ford, Taylor, and all the rest was yet to come – unfortunately, there were significant bottlenecks in the way of this progress. One of these particular bottlenecks (for that is how they saw it), was the control that the experienced worker, the craftsman, had over the production process. After all, there is a significant difference in experience between one who has completed a decade long apprenticeship in order to learn his craft, and some twerp hired off the street who has trouble differentiating his arse from his elbows. If the task is complex enough, the craftsman has almost unlimited control – after all, it’s his experience going into creating the product itself. Therefore, the final authority rests with him, rather than the man with the money.
Skill valued over money. A master carpenter is worthy of more respect than an inexperienced millionaire. What a fascinatingly beautiful concept.
Anyhow. No sense crying over marginalised carpenters, I suppose. To get back to the point, though – since these workers had so much control over the production process, and therefore could stonewall their employers whenever they wanted to, a problem began to emerge. Since the industrialists who set up these manufactories wanted the highest possible returns on their investment - for that is how they saw the situation, in the black and red of a balance sheet – they chose to do so by reducing their costs as much as possible – including worker costs. Fair enough, I suppose. I’d probably not do much different.
Taylor, though, was the nut who set the wheels spinning, in his analysis of the production process. In his view (that of an engineer and a financier), he saw the problem as a battle for power between the workers and the management. Since the power was pretty much balanced (the money on one side against the skill on the other), the situation was deadlocked. Solution? Simplify the production process until any jackass off the street could do it. Result? Mass production, mass consumption, retailing, credit facilities, consumer banks, Wall-mart, K-mart, personal vehicles – the whole fabric of the economy.
What becomes really interesting is to see the differences in the weave of the fabric in different countries.
Germany, for example, considers the skilled worker essential to the production process – they don’t see it as a one sided battle for power. Management is as responsible for worker satisfaction as the workers are for production levels. An equitable balance of responsibility and power.
Japan takes it one step further – the company is your family. Literally. The turnover for workers in Japanese companies is almost nil – before a worker is asked to leave – not fired, asked to leave – every effort is made to find a department/position where the worker can fit comfortably and contribute to the process. Kind of like a beehive, without the wax combs and dripping blobs of honey.
However, to get back to the main point. The stock market, the average bunty, and the internet. There are many reasons why the average bunty would not make money, besides the fact that he might not understand just what the website is telling him. He might not have a large enough bankroll to support himself. One mistake might cost him all his money, and therefore make this option undesirable. The effort of tracking stocks day in and day out might not be something he’s willing to contemplate.
It all comes down to the apprenticeship in the end. While serving as an apprentice, there is a lot more being taught besides the theory and bald practical application of these concepts. There are tacit skills, subtle shortcuts, different styles of working things out…all things that one gains over years and years of watching a master at his craft – which in the end, is more valuable than money itself.
Like they say – light a fire for a man, and he’s warm for a night. Teach a man how to light a fire, and you burn London down.
8 comments:
Teach a man how to light a fire, and he'll burn himself, his family, village, dead bodies, and popcorn in microwave. its an unfortunate truth.
i could use a little fire for my cold pop tarts. no fire makes me sad.
What's a pop tart?
I know a chap here who's called Pop Surd. Still havent figured out why.
is pop surd as sweet as a morning pastry?
pop tart - made by Kellogg Corp., a rectangular toasted pastry, with various fruit fillings, or whatever they can think of to throw inside. yum yum.
Heh, Pop Surd is a friend of mine. Yeah, he's quite sweet.
Pop - not sure why.
Surd - he's a Sardar (it's this religious sect, they wear turbans, dont cut any body hair, wear these metal bracelets on one arm, stuff like that. GREAT guys to have around.)
Im quite impressed..quite quite...quite quite quite....etc
you've really got an interestin mind set...i must say.
anyway..wen u talk about the stock market,how different is it from gambling?,its just a calculated risk isnt it?.no matter how often u follow the ups and downs of the markets..thers just no telling wat will happen next.u gotta keep a constant eye on the global markets as well..cos the indian economy depends on the u.s. and japanese investors as well.unless ur a an executive in a major corporate company,its not possible to predict the next move.i noticed that in another msg u wrote about abt different theories developed.of course they have exceptions,and sure they cant be easily accepted by anyone,but then again thats why its called "THEORY".even in the stock market,ppl jus crete a basis on which they expect the rise and fall of shares,and just as all other theories,it can also fail to explain certain inexplicible movements.
hands on experience is somethin tht is earned with time...and if it not passed on down frm one soul to another,then all progress will cease to occur.
if u teach a man to light a fire,he might burn london down.in the same way,if u teach a man to hammer a nail,he could even lose a thumb.
But if u dint teach him to hammer that nail,there wouldnt be any London at all.
Gambling is the basis on which the stock market operates, I think. When you play a card game, there's one pack of cards (or two, or three, or whatever) - 52 cards, 4 suits, 13 cards per suit. It's easy - well, possible - to calculate the odds of any particular thing happening - there's no random events. Plus your sample space is small enough to allow you to form consistent theories on what's going to happen next - as in, the fifteenth card can be predicted as a probablility, assuming nothing about what's happened before. Say, probablility of a Queen as the fifteenth card, assuming nothing about the 14 previous, is 0.032 (Utterly random example, yes?)
The stock market goes WAY beyond that.
Any number of stocks, influenced by any number of external events, which can be classified under numerous different categories. Maths, at least in the laymans perspective, can't handle that. I wouldn't be able to predict what would happen - I could, though, infer what might happen, based on certain indicators - leading indices, prices in resources leading to that company's product, financial announcments, political scene somewhere in the world, whatever.
Chaos theory might be able to handle it. We don't know yet - otherwise there'd be loads more millionaires, and a lot less fluctuations - better predictions.
What we CAN do, though, is trust in someone who's been handling stocks for a sizeable amount of time, and therefore has developed a lot of instinctive knowledge about them - subconsciously, I feel, we learn a lot more than we do actively. Repitition, developing thicker and thicker neural pathways along certain thought lines.
That's the basic point of an apprenticeship - following someone who's already trodden that path, so you have an idea of what's coming up, and avoid all the beginners mistakes. Essential knowledge, if you want to progress anywhere.
This is where I was leading with another post - the one about hive minds. There's simply not enough time in a humans' life for apprenticeships in enough fields to develop a general theory of everything - It doesn't seem likely that someone would be able to layer enough neural paths on top of each other for them to work coherently with each other.
I know I'm sounding confusing as hell - my appologies. Your post has set me thinking - these are just the initial forays into what I hope will become another post.
Cheers!
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