Analysts/Economists Vs Traders.......

Opportunities in Markets arises because academicians with no real life experience sets policy of real world....
O Ashuji

Most of the blogs, I have posted stresses importance of data in trading. This post will look at qualitative aspect of a Good Trader vs Analyst/Economist.  

1) Economist/Analyst are normally visionaries and rationalizes how things should be, while traders are realistic and accept the way things are.

2) Economist/Analysts most of the times believe market is wrong and will hold on to their view till they are thrown out of job and/or company has gone bankrupt trading on their views. Good Traders, on other hand will always accept market is supreme and opinions are useless.

3) Good Traders are passionate about markets and understanding the same, Good Analyst/Economists are passionate about bonus checks and their views.

4) Analyst/Economist believes markets can be controlled through policies and can be micro managed. Traders on other hand believes, only thing that drives market is human emotions aka Greed/Fear.

5) Economist/Analyst tries to formulate/Quantify human behavior and sees world in black and white, while traders see everything in terms of probability and hence grey shades.

6) Economists/Analysts knows what will happen in future (also how will it happen), why things happened in past and what resulted in present. Good Traders believe future is uncertain (path is probabilistic) and history is great learning tool.

7) Economists are the only breed who gets doctorate without any real life experience...Dr Ben Bernanke, Dr Paul Krugman....

8) Economists/Analysts will have view on everything because view is free and salary is assured. Traders are accountable for their view.

9) Economists/Analysts have visionary hindsight.

10) Economists have the ability to project anything for a country or world as a whole, be it GDP, Inflation, Interest Rates, Deficits, etc and they maintain close to 100% track record of being consistently wrong because most of the times fundamentals change in future and they can't have fundamental under control. Stock Market Analyst tend to know more than Chairman or Founder of the Company.Traders, on other hand, struggles to predict what will happen next working day.

11) Certainty about everything is guiding principal for Economists/Analysts. Uncertainty is the only constant for Traders.

As long as Economists/Analysts exists, Traders will find ample opportunity to make money and world will have frequent business/market cycles. The moment, traders become part of policy making, stock market or other asset markets might not be as exciting.