Quote from bali_survivor:
In the old ways I would know what had gone on in the mind of the student and how he arrived at his answers, in the "modern" way I have not got a clue where he got his crappy ideas from. Was it my teaching or was it something he read on the internet and literally copied?"
I can literally count on one hand the number of people I went to college with that were able to maintain a successful career in a science based discipline. This could be a product of my social circle, however, I believe this is because of the above quote. Good managers spot out good critical thinking and analytical skills in very short time - especially in the Engineering environment. Most graduates simply do not develop these skills in school, some will develop these on the job, however, this is the reason it is difficult to get a good job out of school without some sort of professional experience.
In the academic atmosphere (mostly undergrad - grad school tends to weed out these types), students are not required to think - they are required to regurgitate massive amounts of information. From my experiences in college, a lack of self directed reasoning was usually accepted by professors who do not have enough patience to make a difference (nor did I think that many actually cared).
Very few of my classmates ever reasoned their way to an answer, however, there was an overwhelming desire to find the magic formula via a clever use of resource (internet, text etc.). People stressed on finding the answer rather than the thought process behind it. I refer to these types (jokingly) as keyboard monkeys. You put a 100 of these guys in a room with an Internet connection and give them a problem they will eventually find a solution (give them a 100 years and they might also come up with the next great novel
). On the otherhand, you put one guy in a room who can think for himself and while you might not get the perfect answer, you'll probably get some really great original ideas that when further refined prove to be absolute gems.
What does this mean in terms of markets and a discretionary trader? Well, I believe it requires three very strong traits to become a good discretionary trader:
1. Superb reasoning and analytical skills.
2. Creative and independent thought.
3. Humility and conscientiousness.
I think 90% of people at some level can be taught the first point, the ability to combine 1 and 2 and 3 is where most fail. This is evidenced by the huge numbers of people who purchase systems, newsletters, follow "gurus" and spend thousands on seminars, videos, etc etc. They are doing exactly what the 100 keyboard monkeys are doing in the room I mentioned, they are utilizing resources like the Internet to find all the answers, rather than thinking.
The exponential rise of computer and internet use will only make this worse in time. I have heard so many times - "every answer you ever need is on the internet", which is true to some extent. Its easy work to mow through all that (quality??) content and find things you can cut and paste and claim as your own.
Frankly, I welcome more program trading along with the keyboard monkeys into the market, it will provide good liquidity and potentially some readable algorithms that can be easily spotted and front run.
