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How to read the mind of a mad market without going insane

Mar 01, 2018 - City A.M.

HEN the stock market goes bipolar and oscillates wildly, what's the impact on your emotional state? WComputerised trading algorithms might be increasingly preferred over human beings because side-lining sentiment improves results. Computers "don't get emotional about the stock", to quote a famous line from the movie Wall Street.

The same obviously cannot be said for people. In the hit TV series Billions, an in-house hedge fund psychiatrist is deployed to handle trading floor mood swings.

But it's not just panic, fear and greed in play during volatile periods. Now new research poses the question: is there also a natural human tendency to infer that the market has a mind of its own? Personifying financial risks is what gamblers do when they curse the roulette wheel, convinced it's started scheming against them. This is referred to by psychologists as "intentionality" or the "intentional stance", and appears a universal tend...